bylaws

ASHWOOD TOWNHOMES OWNERS ASSOCIATION, INC. (A Virginia Non-Profit Corporation)

BYLAWS

As Adopted by the Board of Directors on December 3, 2008AMENDED BY-LAWS OF

ASHWOOD TOWNHOMES OWNERS ASSOCIATION, INC.

ARTICLE I NAME AND LOCATION

The name of the corporation is ASHWOOD TOWNHOMES OWNERS ASSOCIATION, INC., hereinafter referred to as the "Association". The principal office of the corporation shall be clo Colonial Properties, Inc., located at Post Office Box 2062, Forest, Virginia 24551; however, meetings of members and directors may be held at such places within the State of Virginia as may be designated by the Board of Directors.

ARTICLE II DEFINITIONS

Section1. "Declarations"shallmeanandrefertotheDeclarationofCovenantsandRestrictionsfor Ashwood Townhomes Planned Unit Development, as recorded in the Office of the Clerk of the Circuit Court of the County of Bedford, Virginia.

Section 2. All other capitalized words or terms used herein shall mean and refer to the definition thereof in Article I of the Declaration.

ARTICLE III MEETING OF MEMBERS

Section 1. Annual Meetings: Regular annual meetings of the members shall be held on the Second Tuesday of May of each year, or as soon as possible thereafter as may best serve the interests of the Members. Each Member of record on the 315t day of December, shall be mailed written notice of the Annual Meeting stating the place, day, and hour of the meeting and the purpose for which the meeting is called including a vote on the proposed amendments, if 3ny, and such notice shall be accompanied by a copy of proposed amendments to the By-Laws.

Section 2. Special Meetings: Special meetings of the members may be called at any time by the President or by the Board of Directors, or upon written request of the Members who are entitled to vote, one­ tenth (1/10) of all the votes of the Members.

Section 3. Notice of Meetings. Written notice of each annual and special meeting of the Members shall be given by, or at the direction of , the Secretary or person authorized to call the meeting, by mailing a copy of such notice, postage prepaid, no less that fifteen (15) nor more than sixty (60) days before such meeting to each Member entitled to vote thereat, addressed to the Member's address last appearing on the books of the Association, or supplied by such Member to the Association for the purpose of notice as of the record date, except that notice of a meeting to act on an amendmeni of the Articles of Incorporation, a plan of merger, a proposed sale of assets or the dissolution of the corporation shall be given not less than twenty­ five (25) nor more than sixty (60) days before the meeting. Such notice shall specify the place, day and hour of the meeting, and, in the case of a special meeting, the purpose of the meeting.

Section 4. Quorum: The quorum for membership meetings shall be one-third of members entitled to cast a vote, or of proxies authorized to cast a vote on behalf of a member, regardless of the class of membership

Section 5. Proxie§: At all meetings of Members. each 'llernber may vote in person or by proxy. All proxiesshallbeinwritingandfiledwiththeSecretary. Everyproxyshallberevocableandshallautomatically cease upon conveyance by the Member of his Lot.

The record date for determining the Members entitled to notice of any

meeting or to vote at any meeting, is the close of business on the date ten (10) days prior to the date of notice of the meeting is given or the date seventy (70) days prior to the meeting, whichever is the latest.

Section 6. Record Date:

ARTICLE IV BOARD OF DIRECTORS

Section 1. Number: The affairs of the Association shall be managed by a Board of Directors, who must be members of the Association. The number of Board Members shall be no less than five (5) and no more than seven (7).

Section 2.-Terms of Office:

A.

B.

The terms of the initial Directors shall be as follows: 1. One Director shall be elected to a term of three (3) years;

Two Directors shall be elected to a term of two (2) years; and 3. Two Directors shall be elected to a term of one (1) year.

Upon the expiration of each of the initial terms for the respective Directors, each subsequent election of Directors shall be for three year terms.

Section 3. Removal: Any director may be removed from the Board, with or without cause, by a majority vote of the Members of the Association. In the event of death, resignation or removal of a director, his successor shall be selected by the remaining members of the Board and shall serve for the unexpired term of his predecessor.

Section4. Compensation:Nodirectorshallreceivecompensationforanyservicehemayrenderto the Association. However, any director may be reimbursed for his actual expenses incurred in the performance of his duties.

ARTICLE V NOMINATION AND ELECTION OF DIRECTORS

Section 1. Nomination: Nomination for election to the Board of Directors shall be made by a Nominating Committee. Nominations may also be made from the floor at the annual meeting. The Nomination Committee shall consist of a chairman, who shall be a member of the Board of Directors, and two or more Members of the Association. The Nominating Committee shall be appointed by the Board of Directors prior to each annual meeting of the members, to serve from the close of such annual meeting until thecloseofthenextannualmeeting,andsuchappointmentshallbeannouncedateachannualmeeting. The Nominating Committee shall make as many nominations for election to the Board of Directors as it shall, in its discretion, determine, but not less than the number of vacancies that are to be filled. Such nominations shall be made from among the Members.

Section 2. Election: Election to the Board of Directors shall be by secret written ballot. As such election, the Members or their proxies may cast, in respect to each vacancy, as many votes as they are entitledtoexerciseundertheprovisionsoftheDeclaration. Thepersonsreceivingthelargestnumberofvotes shall be elected. Cumulative voting is not permitted.

ARTICLE VI MEETINGS OF DIRECTORS

Section 1. Regular Meetings: Regular meetings of the Board of Directors shall be held monthly without notice, at such place and hour as may be fixed from time to time by resolution of the Board. Should said meeting fall upon a legal holiday, then that meeting shall be held at the same time on the next day which

Page 2 of 11

2.

Directors.

c.

isnotalegalholiday. TheBoardmay,initsdiscretion,dispensewiththeholdingofamonthlymeetingifthere are no new of pressing business matters needing attention at that time.

Section 2. Special Meetings:

director.

Section3. Quorum:Amajorityofthenumberofdirectorsshallconstituteaquorumforthetransaction of business. Every act or decision done or made by a majority of the directors present at any duly held meeting at which a quorum is present shall be regarded as the act of the Board.

ARTICLE VII POWERS AND DUTIES OF THE BOARD OF DIRECTORS

Section 1. Powers: In addition to and subject to Powers granted by or limitations imposed by

applicable to:

a. b.

d. e.

f.

h.

law and Founding Documents other than these By-Laws, the Board of Directors shall have power

Acquire, own, hold, improve, maintain, manage, lease, pledge, convey, transfer, or dedicate real or personal property for the benefit of the Members in connection with the affairs of the Association; Establish rules and regulations for the use of property and to review, modify, and approve architectural standards adopted by the Architectural Review Board;

Fix, levy, and collect assessments; Grant and convey easements over and across the Common Areas as may become necessary; Employ, enter into contracts with, delegate authority to, and supervise such persons or entities as may be appropriate to manage, conduct, and perform the business obligations and duties of the Association; Participate in mergers and consolidations with other corporations; Perform acts, as may be reasonably necessary or appropriate, including bringing suit, causing a lien to be filed or foreclosed, suspending membership rights, or enforcing or effectuating any of the provisions of the governing documents; Exercise for the Association all powers, duties and authority vested in or delegated to this Association, and not reserved to the membership by other provisions of these By-Laws, the Articles of Incorporation, or the Declaration; and Declare the office of a member of the Board of Directors to be vacant in the event such member shall be absent from three (3) consecutive regular meetings of the Board of

Section 2. Duties: In addition to and subject to any duties imposed upon the Board of Directors by applicable law or other founding documents, the Board of Directors shall have the duty to:

a.

b. c.

Cause to be kept a complete record of all its acts and corporate affairs, and to present a statement thereof to the Members at the annual meeting of the Members, or at any special meeting when such statement is requested in writing by one-fourth (1/4) of the Class A members who are entitled to vote;

Supervise all officers, agents, contractors and employees of this Association, and to see that their duties are properly performed; As more fully provided in the Declaration, to: i. Fix the amount of the annual assessment against each Lot at least thirty (30) days

in advance of each annual assessment period; ii. Send written notice of each assessment to every Owner subject thereto at least thirty

(30) days in advance of each annual assessment period; and

Page3of 11

Special meetings of the Board of Directors shall be held when called by the President of the Association, or by any two directors, after not less than three (3) days notice to each

i.

g.

d.

e. f. g.

iii. Foreclose the lien against any property for which assessments are not paid within thirty (30) days after due date or to bring action at law against the owner personally obligated to pay the same.

Issue, or to cause an appropriate officer to issue, within fourteen (14) days after demand by any person, a certificate setting forth whether or not any assessment has been paid, or an Association disclosure packet in accordance with the Virginia Property Owner's Association Act. A reasonable charge, not exceeding the amount allowed by law, may be made by the Boardfortheissuanceofanycertificateorpacket. Ifacertificatestatesanassessmenthas been paid, such certificate shall be conclusive evidence of such payment;

Procure and maintain adequate liability and hazard insurance on property owned by the Association; Cause all officers or employees having fiscal responsibilities to be bonded, as it may deem appropriate; and

Cause the Common Area and Landscape Easements to be maintained.

ARTICLE VIII OFFICERS AND THEIR DUTIES

Section 1. Identification of Officers: The officers of this Association shall be a president and vice­ president, who shall at all times be members of the Board of Directors, a secretary, and a treasurer, and such other officers as the Board may from time to time by resolution create.

Section 2. Election of Officers: The initial Directors shall elect officers after the adoption of these By­ Laws; thereafter, the election of officers shall take place at the first meeting of the Board of Directors following each annual meeting of the Members.

Section 3. Term: The officers of this Association shall be elected annually by the Board and each shall hold office for three (3) years unless sooner resigning, removed, or otherwise becoming disqualified to serve.

Section 4. Special Appointments: The Board may elect such other officers as the affairs of the Association may require, each of whom shall hold office for such period, have such authority, and perform such duties as the Board may, from time to time, determine and direct.

Section 5. Resignation and Removal: Any officer may be removed from office with or without cause by the Board. Any officer may resign at any time giving written notice to the Board, the President or the Secretary. Suchresignationshalltakeeffectonthedateofreceiptofsuchnoticeoratanylatertimespecified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section6. Vacancies:AvacancyinanyofficemaybefilledbyappointmentbytheBoard. Theofficer appointed to such vacancy shall serve for the remainder of the term of the officer he or she replaces.

Section 7. Multiple Officers: Until the first annual meeting of the Association, the same person may hold more than one office; thereafter, the offices of the Secretary and Treasurer may be held by the same person, and no person shall simultaneously hold more than one of any of the other offices, except in the case of special offices created pursuant to Section 4 of this Article.

Section 8. Duties: The duties of the officers are as follows:

a. President - The President shall preside at all meetings of the Board of Directors; shall see that orders and resolutions of the Board are carried out; shall sign all leases, mortgages, deeds and other written instruments, and shall co-sign all checks and promissory notes.

Page 4 of 11

b. c.

d.

Vice-President - The Vice-President shall act in the place and stead of the President in the event of his absence, inability or refusal to act, and shall exercise and discharge such other duties as may be required of him or her by the Board. Secretary

Treasurer - The Treasurer shall receive and deposit on appropriate bank accounts all monies of the Association and shall disburse such funds as directed by resolution of the Board of Directors; shall sign all checks and promissory notes of the Association; keep proper books of accounts; cause annual audit of the Association's books to be made by a public accountant at the completion of each fiscal year; and shall prepare an annual budget and a statement of income and expenditures to be presented to the membership at its regular annualmeeting,anddeliveracopyofeachtotheMembers. However,theBoardmaywaive or suspend the requirement of annual audits, and of providing copies of the annual budget to each of the Members if such information is not requested.

ARTICLE IX INSURANCE

Section 1. Authority to Purchase: Notice.

a. Except as otherwise provided in Section 5, all insurance policies relating to the Property shall be purchased by the Board of Directors. The Board of Directors, the Managing Agent and the Association shall not be liable for failure to obtain any coverages required by this Article or for any loss or damage resulting from such failure if such failure is due to the unavailability of such coverages from reputable insurance companies, or if such coverages are so available only at demonstrably unreasonable costs. The Board of Directors shall promptly furnish to each Unit Owner written notice of the procurement of, subsequent changes in, or termination of, insurance coverages in, or termination of, insurance coverages obtained on behalf of the Unit Owners Association (in compliance with Section 55-79.81(b) of the Condominium Act when applicable).

Each such policy shall provide that::

i.

ii.

iii.

When possible, the insurer waives any right to Claim by way of subrogation against the Association, the Board of Directors, the Managing Agent or the Unit Owners, and their respective agents, employees, guests and, in the case of the Unit Owners, the members of their households;

Such policy shall not be cancelled, invalidated or suspended due to the conduct of any Unit Owner (including his invitees, agents and employees) or of the Managing Agent unless prior demand had been made in writing that the Board of Directors or the Managing Agent cure the defect and neither shall have so cured such defect within Sixty (60) days after such demand; and

Such policy may not be cancelled or substantially modified (including cancellation for nonpayment of premium) without at least sixty (60) days prior written notice to the Board of Directors and the Managing Agent and, in the case of physical damage insurance, to all Mortgagees.

c. HAB, LLC, so long as HAB, LLC shall own any Unit, shall be protected by all such policies as a Unit Owner.

All policies of insurance shall be written by reputable companies licensed to do business in the Commonwealth of Virginia.

Page5of 11

- The Secretary shall record the votes and keep the minutes of all meetings and proceedings of the Board and of the membership; keep the corporate seal of the Association and affix it on all papers requiring said seal; serve notice of meetings of the Board and of the Members; keep appropriate current records showing the members of the Association

together with their addresses, and shall perform such other duties as required by the Board.

b.

d.

e. The deductible amount, if any, on any insurance policy purchased by the Board of Directors shall be a Common Expense except as hereinafter provided. Where the claim under any such policy is for components of a Unit or Units, the deductible will be the sole responsibility of the owner or owners of such Unit or Units and assessed to such Owner or Owners except as herein provided. In the event of damage to the components of a unit, or to the common elements (including limited common elements), where the cause of such damage arose in a Unit, other than the unit so damaged, the owner of the Unit wherein the cause of damage arose shall be responsible for the deductible, if any, on any insurance policy purchased by the Board of Directors, regardless of whether such cause arose through the negligence of the owner or any occupants of the unit wherein such cause of damage arose.

Section 2. Physical Damage Insurance:

a. The Board of Directors shall, if possible, obtain and maintain a blanket, "all-risk" form policy of fire insurance with extended coverage, vandalism, maliciousmischief, windstorm, sprinkler leafage (if applicable), debris, removal, cost of demolition and water damage endorsements, insuring the entire Property (including all of the Units and the bathroom and kitchen fixtures initially installed therein by the Developer and the replacements thereto installed by the Developer, but not including furniture, wall coverings, furnishings or other personal property supplied or installed by Unit Owners), together with all air conditioning and heating equipment (including heat pumps) and other service machinery contained therein and covering the interests of the Unit Owners Association, the Board of Directors and all Unit Owners and their Mortgagees, as their interest may appear, (subject, however), to the loss payment and adjustment provisions in favor of the Board of Directors as Insurance Trustee contained in Section 6 and 7, in an amount equal to 100% of the then current replacement cost of the Property (exclusive of the Land, excavations, foundations and other items normally excluded from such coverage), without deduction for depreciation (such amount to be redetermined annually by the Board of Directors with the assistance of the insurance company affording such coverage).

b. Such policy shall also provide:

1. 2.

3.

A waiver of any right of the insurer to repair, rebuild or replace any damage or destruction, if a decision is made pursuant to these By-Laws not to do so; The following endorsements (or equivalent):

"No control" (to the effect that coverage shall not be prejudiced by any act or neglect any occupant or Unit Owner or their agents when such act or neglect is not within the control of the insured, or the unit Owners collectively; nor by any failure of the insured, or the Unit Owner(s) collectively, to comply with any warranty or condition with regard to any portion of the Unit over which the insured, or the Unit Owners collectively,

ii. "Contingent liability from operation of building laws or codes"; iii. "Increased cost of construction" or "condominium replacement cost"; and iv. "Agreed amount" or elimination of co-insurance clause.

That no "other insurance" clause expressly exclude individual Unit Owners' policies from its operation so that the physical damage policy purchased by the Board of Directors shall be deemed primary coverage and in no event shall the insurance coverage obtained and maintained by the Board of Directors hereunder provide for or be brought into contribution with insurance purchased by individual Unit Owners or their Mortgagees, unless otherwise required by law.

Page6of 14

i.

have no control);

c.

A duplicate or original or the policy of physical damage insurance, all renewals thereof, and any subpolicies or certificates and endorsements issued thereunder, together with proof of payment of premiums, shall be delivered by the insurer to any Mortgagee requesting the same,atleastthirty(30)dayspriortoexpirationofthethencurrentpolicy. Priortoobtaining any policy of physical damage insurance or any renewal thereof the Board of Directors shall obtain an appraisal from an insurance company, or such other source as the Board of Directors may determine, of then current replacement cost of the Property (exclusive of the Land, excavations, foundations, and other items normally excluded from such coverage), without deduction for depreciation, for the purpose of determining the amount of physical damage in excess of one percent of the then current replacement cost of the insured Property. The Mortgagee of a Unit shall be notified promptly of any event giving rise to a claim under such policy arising from damage to such Unit.

Section 3. Liability Insurance: The Board of Directors shall obtain and maintain comprehensive general liability (including libel, slander, false arrest and invasion of privacy coverage and errors and omissions coverage for directors) and property damage insurance in such limits as the Board of Directors may from time to time determine, insuring each member of the Board of Directors, the Managing Agent, and each Unit Owner against any liability to the public or to the Unit Owners (and their invitees, agents and employees) arising out of, or incident to the ownership and/or use of the Common Elements or Areas. Such insurance shall be issued on a comprehensive liability basis and shall contain:

a. A cross liability endorsement under which the rights of a named insured under the policy shall not be prejudiced with respect to his action against another named insured;

b. Hired and non-owned vehicle coverage; c. Host liquor liability coverage with respect to events sponsored by the Unit Owners

Association; d. Deletion of the normal products exclusion with respect to events sponsored by the Unit

Owners Association; and e. A "severability of interest" endorsement which shall preclude the insurer from denying liability

to a Unit Owner because of negligent acts of the Unit Owners Association or of another Unit Owner. TheBoardofDirectorsshallreviewsuchlimitsonceeachyear,butinnoeventshall such insurance be less that One Million Dollars covering all claims for bodily injury or property damagearisingoutofoneoccurrence. Reasonableamountsof"umbrella"liabilityinsurance in excess of the primary limits shall also be obtained in an amount not less than Three Million Dollars.

Section 4. Other Insurance: The Board of Directors shall obtain and maintain:

a.

c. d.

Adequate fidelity coverage to protect against dishonest acts on the part of officers, directors, trustees and employees of the Unit Owners Association and all others who handle, or are responsible for handling, funds of the Unit Owners Association, including the Managing Agent. Suchfidelitybondsshall:(i)nametheUnitOwnersAssociationasanobligee;(ii)be written in an amount not less than one-half the total annual assessments for the year or the amount required by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, whichever is greatest; and (iii) contain waivers of any defense based upon the exclusion of persons who serve without compensation from any definition of "employee" or similar expression;

If required by a governmental or quasi-governmental agency, including without limitation the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, flood insurance in accordance with the then applicable regulations of such agency; Workmen's compensation insurance if and to the extent necessary to meet the requirements of law;

Broad form machinery and pressure vessel explosion insurance (if applicable) in an amount not less than One Hundred Thousand Dollars per accident per location; and

Page 7 of 11

b.

a.

e. Such other insurance as the Board of Directors may determine or as may be requested from time to time by a majority of the Unit Owners.

Section 5. Separate Insurance: Each Unit Owner shall have the right and shall have the duty as set forth in the Declaration of Rights, Covenants, Restrictions, Conditions and Obligations of ASHWOOD TOWNHOMES OWNERS ASSOCIATION, INC., at his own expense, to obtain insurance for his own Unit and for his own benefit and that of the Association and to obtain insurance coverage upon his personal property and for his personal liability as well as upon any improvements made by him to his Unit under coverage normally called "improvements and betterments coverage"; provided, however, that no Unit Owner shall be entitled to exercise his right to acquire or maintain such insurance coverage so as to decrease the amount which the Board of Directors, on behalf of all Unit Owners, may realize under any insurance policy maintained by the Board of Directors or to cause any insurance coverage maintained by the Board of Directors to be brought into contribution with insurance coverage obtained by a Unit Owner.

Section 6. Insurance Trustee:

a.

b.

All physical damage insurance policies purchased by the Board of Directors shall be for the benefit of the Unit Owners Association, the Unit Owners, and their Mortgagees as their interests may appear, and shall provide that all proceeds of such pOlicies shall be paid in trust to the Board of Directors as "Insurance Trustee" to be applied pursuant to the terms of Article X.

The sole duty of the Board of Directors as Insurance Trustee shall be to receive such proceeds as are paid to it and hold the same in trust for the purposes elsewhere stated in these By-Laws, for the benefit of the insureds and their beneficiaries thereunder.

ARTICLE X REPAIR AND RECONSTRUCTION AFTER FIRE OR OTHER CASUALTY

Section1. WhenRepairandReconstructionareRequired:ExceptasotherwiseprovidedinSection 4, in the event of damage to or destruction of all or any part of any building or other improvement as a result of fire or other casualty, the Board of Directors shall arrange for and supervise the prompt repair and restoration of the building (including any damaged Units, and the floor coverings, kitchen or bathroom fixtures and appliances initially installed by the Developer, and replacements thereof installed by the Developer, but not including any furniture, furnishings, fixtures, equipment or other personal property supplied, installed, or placedbytheUnitOwnersintheUnits). Notwithstandingtheforegoing,eachUnitOwnershallhavetheright to supervise the redecorating of his own Unit.

Section 2. Procedure for Reconstruction and Repair:

b.

CostEstimates. Immediatelyafterafireorothercasualtycausingdamagetoanyportionof the building, the Board of Directors shall obtain reliable and detained estimates of the cost of repairing and restoring such portion (including any damaged Units and any floor coverings and kitchen and bathroom fixtures and appliances initially installed by the Developer, and the replacements thereof installed by the Developer, but not including any other furniture, furnishings, fixtures, equipment or other personal property supplied, installed or placed by theUnitOwnerintheUnit)toaconditionasfoodasthatexistingbeforesuchcasualty. Such costs may also include professional fees and premiums for such bonds as the Board of Directors as Insurance Trustee determines to be necessary.

Assessments. ExceptasprovidedinArticleIX,Section1(e),iftheproceedsofinsuranceare not sufficient to defray such estimated costs of reconstruction and repair the funds for the payment of the costs thereof are insufficient, the amount necessary to complete such reconstruction and repair may be obtained from the appropriate reserve for replacement

Page 8 of 11

funds and/or shall be deemed a Common Expense and a special assessment therefore shall

be levied. c. Plans and Specification. Any such reconstruction or repair shall be substantially in

accordance with the original construction of the Property, subject to any modifications required by changes in applicable governmental regulations, and using contemporary building materials and technology to the extent feasible.

Section 3. Disbursements of Construction Funds:

a. Construction Fund and Disbursement. The proceeds of insurance collected on account of casualty, and the sums received by the Board of Directors as Insurance Trustee from collections of assessments against Unit Owners on account of such casualty, shall constitute a construction fund which shall be disbursed in payment of the following manner:

ii.

If the estimated cost of reconstruction and repair if less than Fifty Thousand Dollars, then the construction fund shall be disbursed in payment of such costs upon order of the Board of Directors; If the estimated cost of reconstruction and repair if Fifty Thousand Dollars or more, then the construction fund shall be disbursed in payment of such costs upon approval of an architect qualified to practice in Virginia and employed by the Board of Directors as Insurance Trustee to supervise such work, payment to be made from time to time as the work progresses. The architect shall be required to furnish a certificate giving a brief description of the services and materials furnished by various contractors, subcontractors, materialmen, the architect and other persons who have rendered services or furnished materials in connection with the work stating that:

1.

2. 3.

The sums requested by them in payment are justly due and owing and that such sums do not exceed the value of the services and materials furnished; There is no other outstanding indebtedness known to such architect for the services and materials described; and

The cost as estimated by such architect for the work remaining to be done subsequent to the date of such certificate does not exceed the amount of the construction fund remaining after payment of the sum so requested.

b. Surplus. The first monies disbursed in payment of the cost fo reconstruction and repair shall be from insurance proceeds and, if there is a balance in the construction fund after the payment of all of the costs of the reconstruction and repair for which the fund established, such balance shall be divided among all Unit Owners in proportion to their initial assessment and shall be distributed in accordance with the priority of interests at law or in equity in each Unit.

c. Common Elements or Property. When the damage is to both Common Elements or Property and Units, the insurance proceeds shall be applied first to the cost of repairing those portions of the Common Elements which service the Units, then to the cost of repairing the other Common Elements and thereafter to the costs of repairing the Units.

d. Certificates. The Board of Directors as Insurance Trustee shall be entitled to rely upon a certificate executed by the President or Vice President, and the Secretary, certifying:

i. Whether the damaged Property is required to be reconstructed and repaired; ii. The name of the payee and the amount to be paid with respect to disbursement from any construction fund where surplus funds to be distributed are less than the

assessments paid by the Unit Owners; and

Page 9 of 11

i.

iii. All other matters concerning the holding and disbursing of any construction fund. Any such certificate shall be delivered to the Board of Directors as Insurance Trustee promptly after request.

Section 4. When Reconstruction is Not Required. In the event the Board of Directors elects not to repair damage to the Common Elements or Property, the Board of Directors shall remove all remains of the damaged improvements and restore the sire thereof to an acceptable condition compatible with the remainder of The Development and the balance of any insurance proceeds received on account of such damage shall be held as part of the general fund of the Association. In the event that the Declaration of Rights, Covenants, Restrictions, Conditions and Obligations of ASHWOOD TOWNHOMES OWNERS ASSOCIATION, INC. shall require repair or reconstruction, the Association may relieve a Unit Owner of such duty by vote of a two-thirds majority of the Board of Directors.

ARTICLE XI COMMITTEES

The Association shall appoint an Architectural Control Committee, as provided in the Declaration, and a Nominating Committee, as provided by these By-Laws. In addition, the Board of Directors may appoint other committees and delegate to them such duties and authority as deemed appropriate in carrying out its purpose.

ARTICLE XII BOOKS AND RECORDS

The books, records and paper of the Association shall at all times during reasonable business hours, be subject to inspection by any Member. The Declaration, the Articles of Incorporation and the By-Laws of the Association shall be available for inspection by any Member at the principal office of the Association, where copies may be purchased at a reasonable costs.

ARTICLE XIII ASSESSMENTS

As more fully provided in the Declaration, each Member is obligated to pay to the Association annual, special and utility assessments which charges and payment obligations are hereby secured by a continuing lien upon the property against which the assessment is made, including the individual Lot as owned by each Member. Any assessments, which are not paid when due, shall be delinquent. If the assessment is not paid within fifteen (15) days after the due date, the assessment shall bear interest from the date of delinquency at the rate of twelve percent (12%) per annum, and shall be subject to a late charge equal to five percent (5%) ofthedelinquentamount. Ifanassessment,togetherwithanylatechargesthereon,isnotpaidwithinthirty (30) days after the due date, the Association may bring an action in law against the Owner personally obligated to pay the same or foreclose the lien against the property, and interest, late charges, costs, and reasonableattorney'sfeesofanysuchactionshallbeaddedtotheamountofsuchassessment. NoOwner may waive or otherwise escape liability for the Assessments provided for herein by non use of the Common Area or abandonment of his or her Lot.

ARTICLE XIV CORPORATE SEAL

The Association may have a seal in circular form having within its circumference the words: ASHWOOD TOWNHOMES OWNERS ASSOCIATION, INC.

Page 10 of 11

ARTICLE XV AMENDMENTS

Section 1. These By-Laws may be amended, at a regular or special meeting of the Members, by a vote of one-third ( 1/3) of the Members present in person or by proxy.

Section 2. In the case of any conflict between the Articles of Incorporation and these By-Laws, the Articles shall control; and in the case of any conflict between the Declaration and these By-Laws, the Declaration shall control.

ARTICLE XVI MISCELLANEOUS

The fiscal year of the Association shall begin on the first day of January, and end on the 3 1st day of December of every year, except that the first initial fiscal year of the Association shall begin on the date of incorporation.

IN WITNESS WHEREOF, we, being all of the Directors of ASHWOOD TOWNHOMES OWNERS ASSOCIATION, INC., have hereunto set our hands this 3rd day of December, 2008.

,r

CERTIFICATION I, the undersigned, do hereby certify:

That I am the duly elected and acting Secretary of ASHWOOD TOWNHOMES OWNERS ASSOCIATION, INC., a Virginia corporation, and,

That the foregoing By-Laws constitute the original By-Laws of the said Association, as duly adopted at a special meeting of the Board of Directors thereof, held on the 3rd day of December, 2008.