VILLAGE GREEN OWNERS ASSOCIATION, INC. 501-B VILLAGE GREEN DRIVE MOREHEAD CITY, NC 28557

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1 VILLAGE GREEN OWNERS ASSOCIATION, INC. 501-B VILLAGE GREEN DRIVE MOREHEAD CITY, NC May 29, 2008 To: Home Owners of Village Green Condominiums From: Village Green Board of Directors Subject: Increase in Insurance Premium As reported to you earlier, when the insurance policies covering Village Green units were renewed last November there was a sharp rise in premiums, approximating 40 percent. That increase was experienced in all the coastal Carolina counties. It was decided at that time not to increase monthly insurance payments right away because of questions as to whether the units and buildings were properly valued for insurance purposes. A detailed review has determined they were not. The single-story units have been slightly overvalued; the two-story units significantly undervalued; and Unit 501-A significantly undervalued. This has been traced to the fact that the developer did not adjust t he insurance coverage after deciding to build the two-story units larger than originally contemplated and did not adjust the square footage of Unit 501-A. Insurance valuations are based on square footage. The basic two-story is 2044 square feet, more than 400 square feet larger than what it had been listed at for insurance purposes. This imbalance has been corrected and all units are now listed at their proper sizes and valuations. All of the single-story units are carried at 1361 square feet with the exception of 501-A. Unit 501-A was carried as 1361 square feet but is actually 1577 square feet, an increase of 216 square feet. Attached is a comparison of past and present premium costs and unit valuations. Obviously the increased square footage, plus the rate increases that took effect last November require an upward revision of monthly insurance payments. The insurance premiums were also increased slightly when the directors, in order to insure adequate coverage, last November adjusted the policies to provide for a $105 per square foot rebuilding cost up from $100 a square foot. The cost of this prudent adjustment was minor in the overall scheme of things. As a result of these necessary adjustments, the monthly insurance payment for a single-story $227; and Unit 501-A will go from $188 to $203. Please write your checks accordingly. Also, these increases must be postdated to last November to provide adequate funds in the insurance

2 at $15 per month) for Unit 501-A. These assessments will be due and payable on September 1. The directors strongly urge all owners, particularly owners of two-story units and Unit 501-A to promptly check with their personal insurance agent to see how these adjustments might affect their personal homeowner s HO6 policy as it applies to their building. There could be adjustments to be made. And remember, the association insurance covers only the basic unit. Any additions are the responsibility of the individual owner. All of the two-story units are not the same and could be larger than the 2044 square feet listed by the association. It behooves you to make sure you are properly covered. The $ monthly dues structure remains the same. Attached is a copy of the present and revised insurance premium structure. Please feel free to contact a board member if you have further questions. Sincerely, Village Green Owners Association Board of Directors Frank St. Mark Bill White Anne Erickson Vince Howard Lee Meeks President Vice President Secretary Treasurer Director

3 VGOA INSURANCE PREMIUM PER UNIT/PER YEAR/PER MONTH ONE STORY DUPLEX 1,361 SF/UNIT X 42 UNITS = 57,162 SF ONE STORY SINGLE UNIT 1,577 SF/UNIT X 1 UNIT = 1,577 SF TWO STORY DUPLEX 2,044 SF/UNIT X 40 UNITS = 81,760 SF TOTAL SF = 140,499 SF PREMIUM = $79, (07-08) + $ (PREMIUM TO COVER ADJUSTED SF OF TWO STORY DUPLEX & ONE STORY SINGLE UNIT) = $83, PREMIUM PER SF: $83, / 140,499 SF = $ PER SF ONE STORY DUPLEX PER YEAR/PER MONTH 57,162 SF X = $34, PER YEAR/42 UNITS = $ PER YEAR / 12 MONTHS = $ PER MONTH ONE STORY SINGLE UNIT PER YEAR/PER MONTH 1,577 SF X = $ PER YEAR / 12 MONTHS = $ PER MONTH TWO STORY DUPLEX PER YEAR/PER MONTH 81,760 SF X = $48, PER YEAR / 40 UNITS = $ PER YEAR / 12 MONTHS = $ PER MONTH PREMIUM $34, ONE STORY DUPLEX $ ONE STORY SINGLE UNIT $48, TWO STORY DUPLEX $83, MONTHLY DUES - PRESENTLY ONE STORY DUPLEX: $125 + $63.00 = $ ONE STORY SINGLE UNIT: $ $63.00 = $ TWO STORY: $ $ $ MONTHLY DUES BASED ON REVISED INSURANCE PREMIUM ONE STORY DUPLEX = $ $68.00 = $ (ADJUSTMENT + $5.00) ONE STORY SINGLE UNIT = $ $ = $ (ADJUSTMENT + $30.00)

4 VILLAGE GREEN OWNERS ASSOCIATION, INC. 501-B VILLAGE GREEN DRIVE MOREHEAD CITY, NC June 9, 2008 To: Home Owners of Village Green Condominiums From: Village Green Board of Directors Subject: CORRECTION: Increase in Insurance Premium In our letter to owners dated May 29, 2008 subject above contains a typographical error in paragraph four. The current paragraph reads as follows: The As a result of these necessary adjustments, the monthly insurance payment for a single-story $227; and Unit 501-A will go from $188 to $203. Please write your checks accordingly. Also, these increases must be postdated to last November to provide adequate funds in the insurance at $15 per month) for Unit 501-A. These assessments will be due and payable on September 1. The corrected paragraph reads as follows: The As a result of these necessary adjustments, the monthly insurance payment for a single-story $227; and Unit 501-A will go from $188 to $203 Please write your checks accordingly. Also, these increases must be retroactive to last November to provide adequate funds in the insurance

5 at $15 per month) for Unit 501-A. These retroactactive assessments will be due and payable on September 1. Please feel free to contact a board member if you have further questions. Sincerely, Village Green Owners Association Board of Directors Frank St. Mark Bill White Anne Erickson Vince Howard Lee Meeks President Vice President Secretary Treasurer Director

hello! & introductions

hello! & introductions Areas where density bonus would apply RH-1 and RH-2 No density limits or residential not allowed density bonus allows, based on number of affordable units and level of affordability: