DISCLOSURE STATEMENT for

                                   GOSHORN LAKE COTTAGE CONDOMINIUMS

 

 

Provided By:   RCNE, Inc.

                        3581 – 65th Street

                        Saugatuck, Michigan  49453

Tel. No. (616) 857-4716

 

This is the Disclosure Statement for Goshorn Lake Cottage Condominiums, which is a resort condominium project located in the Township of Saugatuck, Allegan County, Michigan.  The project may consist of up to 30 residential units.  This Statement is intended to explain certain aspects of the Condominium to prospective buyers.

 

THIS DISCLOSURE STATEMENT OF THE CONDOMINIUM IS NOT A SUBSTITUTE FOR THE MASTER DEED, THE CONDOMINIUM BUYER'S HANDBOOK OR OTHER APPLICABLE LEGAL DOCUMENTS.  AS A PROSPECTIVE BUYER YOU SHOULD READ ALL SUCH DOCUMENTS TO FULLY ACQUAINT YOURSELF WITH THE PROJECT AND YOUR RIGHTS AND RESPONSIBILITIES RELATING TO THE PROJECT.

 

THE CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU OF THE MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES IS DESIGNATED AS THE "ADMINISTRATOR" FOR CONDOMINIUMS BY THE MICHIGAN CONDOMINIUM ACT.  THE BUREAU MAKES NO REVIEW OF CONDOMINIUM DOCUMENTS NOR ANY RECOMMENDATIONS AS TO THE MERITS OF ANY PROJECT OR THE PURCHASE OF UNITS IN A PROJECT.

 

IT IS RECOMMENDED THAT YOU CONSULT WITH AN ATTORNEY OR OTHER PROFESSIONAL ADVISOR PRIOR TO PURCHASING A CONDO­MINIUM UNIT.

 

 

Effective Date:           July 15, 2004

 

 

 

 

 

Prepared By:              Nyal D. Deems

Varnum, Riddering, Schmidt & HowlettLLP

Bridgewater Place - P.O. Box 352

Grand Rapids, Michigan  49501-0352

 

 


                                     GOSHORN LAKE COTTAGE CONDOMINIUMS

 

                                                      DISCLOSURE STATEMENT

 

                                                                 Table of Contents

                                                                                                                                                     Page

1.      Introduction................................................................................................................................................................... 1

2.      The Condominium Concept...................................................................................................................................... 1

3.      Description Of The Project...................................................................................................................................... 2

4.      Condominium Documents........................................................................................................................................ 3

5.      Developer's Background And Experience...................................................................................................... 3

6.      Administration Of The Project........................................................................................................................... 4

7.      Project Warranties.................................................................................................................................................... 5

8.      Escrow Requirements................................................................................................................................................ 5

9.      Budget And Assessments......................................................................................................................................... 5

10     Restrictions Applicable To The Condominium........................................................................................... 6

11.    Enforcement Provisions........................................................................................................................................... 6

12.    Insurance........................................................................................................................................................................... 7

13.     Private Drives And Easements.............................................................................................................................. 7

14.     Real Estate Taxes......................................................................................................................................................... 8

15.     Recreational Facilities............................................................................................................................................ 8

16.     Legal Matters................................................................................................................................................................. 8

 

 

17.   Estimated Operating Budget............................................................................... ……..Exhibit A

 

18.   Development Team........................................................................................................ Exhibit B

 

19.   Rules and Regulations…………………………….…………………………………Exhibit C


DISCLOSURE STATEMENT

FOR

GOSHORN LAKE COTTAGE CONDOMINIUMS

 

                                                                             

            1.         Introduction.  Condominium development in Michigan is governed by a statute called the Michigan Condominium Act, which is Act 59 of the Public Acts of 1978, as amended (the "Act"), and by rules adopted by the Michigan Department of Consumer and Industry Services, the state agency which administers the Act.  On the following pages RCNE, Inc., as developer (the "Developer") of the Goshorn Lake Cottage Condominiums project (the "Project"), has set forth certain facts about the Project and the persons involved in its development which it believes will assist a prospective buyer in reviewing the Project.  This Disclosure Statement, together with copies of the legal documents intended for the creation and operation of the Project (the "Condominium Documents"), are furnished to each buyer to fulfill the requirement of the Act that the Developer disclose to prospective buyers the characteristics of the condominium units which are offered for sale.  The Condominium Documents constitute the only authorized description of the Project, and none of the Developer's representa­tives are permitted to vary the terms stated in those Documents except by written amendment to the Condominium Documents.

 

            2.         The Condominium Concept.  "Condominium" is a form of real property ownership. Under Michigan law, the portion of the condominium which is individually owned has the same legal attributes as any other form of real estate and may be sold, mortgaged or leased subject to the restrictions contained in the Condominium Documents.  A condominium project is established by recording a master deed in the office of the register of deeds for the county in which the project is located.

 

Each owner of a condominium unit in the Project (the "Co‑owner") will own a portion of the building in which the residence is located (the "Unit"), to which the Co-owner receives a warranty deed, and will be one of a number of mutual owners of common facilities (the "common ele­ments") which serve both the Co-owner's Unit and other units in the Project.  The units and the common elements are described generally in the master deed, and each unit's boundaries and dimensions are shown in the condominium subdivision plan attached to the master deed.  All portions of the Project which are not included within the units constitute the common elements and are owned by all Co‑owners in equal undivided proportions.  Limited common elements are those common elements which are set aside for the use of less than all unit owners.  All other common elements are designated as general common elements for the use of all unit owners.

 

The interrelationship of individual ownership of units and joint ownership of common elements requires that certain restric­tions be imposed on the use of the units and the common elements for the mutual benefit of all.  Such restrictions are contained in the condominium bylaws which are recorded as a part of the master deed.  The Condominium Documents are prepared with the goal of allowing each Co‑owners individual freedom and discretion without permitting any one owner to infringe upon the rights and interests of the group at large.  All Co‑owners must be familiar with and abide by such restrictions if condominium living is to be an enjoyable experience.

 

            3.         Description of the Project. Goshorn Lake Cottage Condominiums is a resort condominium project located in Saugatuck Township and Laketown Township, Allegan County, Michigan (the "Condominium").  The Project is a conversion of a previously existing use known as Goshorn Lake Resort from rental cottages into resort condominium units.  It is being developed in a single phase and will contain a maximum of 30 condominium units. 

 

The Project is comprised of 23 freestanding wooden cottage units.  Each unit has its own parking area and individual entry.  All units have a separate furnace, hot water heater, air conditioning and some units feature wood burning fireplaces.

 

The land, walkways, gravel drives, landscaping, recreational facilities and common utility systems are all general common elements which are owned and used in common by all Co‑owners. Individual Co‑owners also have an exclusive right to use the limited common elements of the Project such as decks, porches and/or adjoining walks.

 

The Developer has reserved the right to expand the Condominium to add two parcels of property; one on the north side and one on the south side of the Project.  Each parcel is anticipated to have one unit located upon it if and when such parcel is added to the Project.  The Developer has also reserved the right to either convert the area shown on the subdivision plan in the vicinity of the pool, pavilion and basketball court to establish units on the east side of those recreational facilities or the Developer may contract the Condominium to remove that convertible-contractible area from the Condominium and with the successive right to return it to the Condominium at a later date.  In each event units may be established in the convertible-contractible area.  The total number of units in that area may not cause the Condominium to expand to exceed 30 units.  Duplexes may be constructed in the convertible-contractible area.

 

The Developer has reserved the right to build additional recreational facilities such as a sundeck and tennis court(s) within the Condominium.  To the extent that the Developer contracts the Condominium to remove land which includes any of the recreational facilities, an easement shall be established permitting the use of all of the recreational facilities in the contracted area by the units in the Condominium.  Hence even if a contraction occurs which includes the land on which the recreational facilities are located, there shall be no loss of use of those facilities by the units in the Condominium.

 

The Developer has agreed to construct storage sheds of 200 square feet or less in the vicinity of the respective units within the Condominium except for Units 1, 2, 4 and 9.  Each storage shed will serve multiple units and be located in the vicinity of the units to which they are an appurtenance.  The exterior of each storage shed will be a general common element maintained by the association.  The interior will be divided into limited common elements each appurtenant to the Unit which it is assigned for its use and the interior space assigned to a unit will be maintained by the unit to which that interior space is assigned. 

 

Easements are granted across the Condominium property for use of the properties shown on the subdivision plan as future development areas and the same easement may be used to benefit the contraction area in the event it is removed from the Condominium. 

 

The Developer has reserved the right to assign rights of use to the recreational facilities in the Project to the properties in the expansion area, the contraction area, if it is contracted, and any other properties owned by the Developer in Section 3 of Saugatuck Township, located along 65th Street.  Any such residence may use the recreational facilities by paying the fee set by the Association, which shall not exceed $500 per year in 2004 and 2005 and shall not increase by more than 3% per year thereafter.

 

            4.         Condominium Documents.  Goshorn Lake Cottage Condominiums has been established as a condominium project by the recording of a master deed in the Allegan County Records (the "Master Deed"), a copy of which either has been or will be delivered to each purchaser at least 9 business days prior to closing.  The Condominium Bylaws and the Condominium Subdivision Plan, a three-dimensional survey establishing the physical relationship and location of each of the units in the Project, are attached as exhibits to the Master Deed. Other Condominium Documents include this Statement, the Articles of Incorporation, the Corporate Bylaws of the Goshorn Lake Cottage Condominium Association, a non-profit corporation which serves as the association of Co‑owners for the Goshorn Lake Cottage Condominiums (the "Association").

 

The Master Deed contains a definition of terms used to describe the Project, the percentage of value assigned to each unit, a description of both the limited and general common elements constituting the Project, and a statement as to the responsibility of the individual Co-owners and of the Association for upkeep and maintenance of the common elements.  All units in the Project have been assigned an equal percentage of value by the Developer.  The Master Deed also reserves to the Developer the right to modify the number, size, style and location of any units or common elements in the Project which have not been sold or which are not subject to a binding purchase agreement by an amendment or series of amendments to the Master Deed.  Such amendments do not require the consent of any Co-owner or mortgagee providing that the changes do not unreasonably impair or diminish the appearance of the Project or the view, privacy or other significant attribute of any unit which adjoins a modified unit or common element.

 

The Condominium Bylaws contain provisions relating to the operation, management and fiscal affairs of the Condominium, including authorization for the levy of both regular and special assessment of the Co-owners to pay for the costs of operation. Restrictions on the ownership, occupancy and use of condominium units in the Project are listed in the Bylaws, which also contains provisions allowing the Association to adopt additional rules and regulations governing the use of the units and the common elements which are not inconsistent with the Condominium Bylaws.

The Condominium Subdivision Plan contains a survey of the condominium land showing the location of all buildings and common utility systems.  Floor plans and elevations of individual units are also depicted in the Subdivision Plan, together with those common elements which can be shown on the drawings.

 

            5.         Developer's Background and Experience.  The Project is being developed by RCNE, Inc., a Michigan corporation. The principals of RCNE, Inc., Richard L. Gillette, President, and Cathleen A. Gillette, Secretary, bring with them experience and skills essential to condominium development based upon their ownership of the Goshorn Lake Resort for many years.

 

The names, addresses and previous experience with condominium projects of the Developer and of any management agency, real estate broker,  escrow  agent, project  engineer,  attorney  and/or other member of the "development team" involved in the Project are set forth on Exhibit B attached to this Statement.

 

            6.         Administration of the Project.  The responsibility for management and maintenance of the Project is vested in the Goshorn Lake Cottage Condominium Association, which has been incorporated by the Developer as a non-profit corporation under Michigan law.  Each Unit Co-owner automatically becomes a member of the Association when that party purchases a unit in the Project. Since each unit in the Condominium has been assigned an equal percentage of value, the owner of each unit will be entitled to one vote at all meetings of the Association and will share equally with all other owners in the expenses and proceeds of administration.

 

The Association was formed by certain individuals acting at the request of the Developer.  These persons now make up the board of directors of the Association and will control its affairs until a new board of directors is elected by the owners.  This election will take place at the initial meeting of the members of the Association, which must be called by the Developer within 120 days after legal or equitable title to 75% of the units in the Project have been conveyed to non-Developer Co‑owners, but in no event later than 54 months after the first conveyance of title to such a person has been made.  The composition of the board as between Developer representatives and non-Developer Co‑owners will thereafter be adjusted from time to time under the formula described in the Condominium Bylaws.

 

Not later than 120 days after conveyance of legal or equitable title to non-Developer Co‑owners of 1/3 of the units in the Project, or 1 year after the initial conveyance of a unit to such a person, whichever first occurs, 2 or more persons will be selected from among the non-Developer Co‑owners to serve as an advisory committee to the board of directors.  The advisory committee is intended to function as an informal organization with which the board can consult on matters concerning the Condominium. At such meetings, the Developer intends to provide the advisory committee with information about the development of the Condominium and to receive recommendations from the committee.  The members of the advisory committee will be appointed by and serve at the pleasure of the Developer.

 

The Bylaws of the Association permit the hiring of a professional manager or management company to manage the Project.  The Developer has not entered into any such management contract. Rather, the management of the Project is being handled by the Developer without charge for its time, but the cost of goods and services purchased and out-of-pocket expenses incurred by the Developer for management purposes are included in the annual budget of the Association attached as Exhibit A.  This arrangement, as well as any formal contract between the Association and the Developer or a management agent or company related to the Developer which might be entered into before the date of the initial meeting of Co-owners, is subject to termination at the option of the Co-owners upon their assumption of control of the Condominium, with or without cause.

 

Additional information about the organization and operation of condominiums in Michigan may be found in the Condominium Buyer's Handbook published by authority of the Michigan Department of Commerce, a copy of which either has or will be furnished to you by the Developer.

           

            7.         Project Warranties.  Goshorn Lake Cottage Condominiums is a conversion project whose units are already occupied on a rental basis, and as such, no project warranties are provided. This means that all purchasers will take their Units “as is”, and will assume sole responsibility for any repairs that may need to be made.

 

            8.         Escrow Requirements.  Section 83 of the Condominium Act requires that all reserva­tion deposits received from a prospective buyer under a preliminary reservation agreement must be deposited in an escrow account with an authorized escrow agent.  In the event that the prospective buyer decides to cancel the preliminary reservation agreement, all such deposits must be refunded to that party within 3 business days after notice of cancellation is received.

 

Section 84 of the Condominium Act provides that all payments received from a prospective buyer under a purchase agreement must also be deposited in the escrow account, and must be refunded if the purchase agreement is canceled within 9 business days after receipt by the buyer of the Condominium Documents which the Developer is required to furnish under Section 84(a).  This waiting period may be waived by the Purchaser if desired.

 

            9.         Budget and Assessments.  The Condominium Bylaws require that the board of directors adopt an annual budget for the operation of the Project.  The initial budget was formulated by the Developer to estimate the reasonably predictable expenses of administration of the Project, including a reserve for replacement of major structural components of the buildings and other common elements as needed in the future.  A copy of this budget is attached to this Statement as Exhibit A.  The amount projected as expenses for the initial year of the Association is $38,880.  This amount does not include expenses for utilities or real property taxes which are billed individually to and must be paid directly by each Co‑owner.

 

Because the budget must necessarily be prepared in advance, it reflects estimates of expenses based on past experience.  These estimates may prove to be inaccurate during actual operations on account of such factors as increases in the cost of goods and services, the need for repair or replacement of common elements and property improvements.  If such adjustments should occur, the budget will need to be revised accordingly.

 

Until control of the Association has been turned over to the Co-owners on the "Transitional Control Date", the Developer is required to supplement the income received by the Association to the extent necessary to keep the budget balanced and the Association "in the black".  During this period, Units owned by the Developer are not subject to assessments from the Association unless conveyed or leased by the Developer to a third party.

 

The Association's only other source of revenue to fund the budget is by assessment of its members who own units, excepting the Developer.  For this reason, each Co-owner must pay an annual assessment which is determined by dividing the balance of the projected budget expenses by the number of units in the Project as established in the Master Deed.  This annual assessment must be paid in 12 equal monthly installments throughout the year, on the first day of the month in which it becomes due.  Thus, on the basis of the budget attached as Exhibit A, the estimated average monthly assessment for the Project will be in the amount of $135.00 per unit, although actual assessments will vary somewhat depending on the number of units at the time the assessment is levied.

 

To provide working capital, each buyer must also pay to the Association at closing of the purchase of a unit both the pro-rata share of the current assessment for the Unit and an additional sum equal to 2 month's assessments for the Association reserves.  This additional payment may, at the Devel­oper's option, be placed either in a short-term operating capital reserve or in the long-term repair and replacement reserve, for use by the Association or Developer as needed from time-to-time. The reserve deposit is not refundable and will not apply as a credit against any future quarterly installment or annual assessment.  The board of directors may also levy special assessments to cover expenses which were not anticipated in the budget as permitted by the Condominium By‑laws.

 

            10.       Restrictions Applicable to the Condominium.  Owners of Condominium units will be bound by various use and occupancy restrictions applying to both the Condominium units and the common elements.  For example, there are prohibitions against conducting commercial or quasi-commercial activities from any unit, and making changes in the exterior appearance of any unit or common element, using firearms, fireworks or other dangerous projectiles on the Condominium property, and/or keeping pets or other animals on the Condominium property without prior written permis­sion from the board of directors of the Association.

 

It is difficult to paraphrase all the restrictions without risking the omission of some portion that may be of significance to a particular purchaser.  Consequently, each buyer should carefully review the Master Deed and Condominium By‑laws to be sure that they do not infringe on an intended use which the buyer feels is important.  None of the restrictions prohibit the Developer from carrying on sales activities as long as the Developer is selling units in the Condominium.

 

            11.       Enforcement Provisions.  Compliance with use restrictions may be enforced by the levy of fines, or by legal action seeking damages or an injunction against the offending Co-owner. The board may also take direct action to correct any condition which violates the By‑laws, may prohibit use of the common elements by a Co-owner in default, or may elect to discontinue furnishing services to the unit involved upon 7 days notice to the Co‑owner in default.  If assessments are not paid by the Co-owner of a Condominium unit when due, the Association may charge reasonable interest or assess late charges from and after the due date.  The Association is also given a lien on the unit which may be enforced as described above, or by foreclosure proceedings in the manner provided by the Condominium Act.  Co-owners should be aware, however, that Section 58 of the Michigan Condomin­ium Act provides that if the holder of a first mortgage or other buyer obtains title to a unit as a result of foreclosure of that mortgage, such holder of the first mortgage or other buyer is not liable for unpaid assessments against that unit and which had become due prior to foreclosure.  These unpaid assessments then become common expenses which are collectible from all unit Co-owners.

 

            12.       Insurance.  The Condominium documents require that the Association carry fire and extended coverage for vandalism and malicious mischief, casualty insurance, liability insurance and worker's compensation insurance (if applicable) with respect to the general common elements of the Project. Such policies may contain deductible clauses which, in the event of a loss, may result in a portion of such loss being borne by the Association.  The board of directors is responsible for obtaining such insurance coverage for the Association, and each Co‑owner's pro rata share of the annual Association insurance premiums is included in the Condominium assessment.  The Association insurance policies will be available for inspection at the offices of the Developer, at the address shown on the face sheet of this Statement.

 

The casualty insurance coverage provided by the Association will not cover the limited common element buildings, or the interior of the Condominium units.  No coverage will be provided for property of a Co-owner located outside the Unit on the grounds of the Project or on a limited common element appurtenant to a unit.  For that reason, all Co-owners are cautioned that it is their own responsibility to insure the entire building in which the Unit is located, together with its contents and any improvements. 

 

Each Co-owner must also obtain personal liability coverage against injury to persons or damage to property resulting from accidents in and about the Co-owner's Unit, naming the Condominium Association as an additional insured.  An insurance agent should be consulted in order to decide just what coverage will be needed for protection, since without such coverage a Co-owner will be uninsured for any loss that might occur within the Co-owner's Unit, to the Co-owner's property or to the Co-owner's guests.

 

            13.       Private Drives and Easements.  Goshorn Lake Cottage Condominiums is located off 65th Street, which provides access to other public streets and highways serving the Township and/or Village of Saugatuck.  As a public street, 65th Street will be maintained and plowed by the County of Allegan.

 

All private drives within the Project, as well as open parking areas and common walkways, are General Common Elements of the Project and must be plowed, maintained and repaired as needed by the Condominium Association.  These expenses will ultimately be paid by the Co‑owners as a part of their monthly assessments.  The drives and parking areas are gravel and will require some routine maintenance, although it is impossible to estimate just how much maintenance may be required in any given year as their life expectancy will vary depending upon the extent of maintenance provided, type of use and weather conditions encountered.

 

The Condominium premises will be subject to a number of easements.  The Master Deed describes certain reciprocal easements granted to Co‑owners and to the Association.  There may also be easements relating to drainage and utilities which will be described in each title insurance commitment and title insurance policy furnished to buyers.

 

Until development of all the land described in the Master Deed has been completed, the Developer has reserved the right to unrestricted use of all roads, drives and walkways of the Condomin­ium, and easements to utilize, tap and tie into, extend and enlarge all utility mains located on Association property without the payment of any charge or fee to the Association.

 

            14.       Real Estate Taxes.  Real property taxes on the units in the Condominium are assessed by the Township of Saugatuck, the County of Allegan and the Saugatuck School District. Under Michigan law, such taxes are required to be assessed on the basis of 50% of true cash value.

 

Except for the year in which the Project is established, real property taxes and assessments are levied individually against each unit and not against the Project as a whole.  These taxes cover both the unit and its proportionate share of the common elements.  No taxes or assessments are levied separately against the common elements, either general or limited.

 

In the year in which the Project is established, the taxes and assessments for the property on which units are or will be located will be billed to the Developer.  Upon the construction and/or sale of a unit in that year, the proportionate amount of taxes and assessments attributable to a unit and paid by the Developer in the year of sale will be prorated and charged to the buyer of such newly constructed unit at the closing.  The Developer will also pay or contribute its pro-rata share to the payment of such taxes and assessments based upon the number of units which it owns at the time the taxes are billed.

 

It is impossible to determine with any degree of accuracy at this date the amount of real property taxes and/or assessments which may be levied in subsequent years.  Such taxes are a function of both property values and tax rates which may either rise or fall in response to inflation levels, community needs and other factors beyond the Developer's control.

 

15.      Recreational Facilities. Goshorn Lake Cottage Condominiums is located on the shores of Goshorn Lake, and includes a swimming pool, pavilion, basketball court and beach area which can be used by the Owners . Other recreational facilities may be constructed in the area between the swimming pool and Goshorn Lake.

 

            16.       Public Sewer.   The Township of Saugatuck has extended public sewer to 65th Street.  All Units in the Goshorn Lake Project will be connected to the public sewer.  The sewer assessments and hookup fees for each unit shall be paid by the Developer.

 

            17.       Legal Matters.  There are no pending proceedings, either legal or administra­tive, which involve either the Condominium Project or the Developer and its officers and shareholders in their capacity as such, and the Developer has no knowledge as to any such proceedings which have been threatened in the future.  Varnum, Riddering, Schmidt & Howlett LLP, 17th Floor, Bridgewater Place, P.O. Box 352, Grand Rapids, Michigan, have served as legal counsel in connection with the preparation of this Disclosure Statement and other Condominium Documents.  Legal counsel has not passed upon the accuracy of the factual matters contained in such documents.

 

 

 

            THE MATTERS DISCUSSED IN THIS DISCLOSURE STATEMENT ARE INTENDED TO HIGHLIGHT CERTAIN IMPORTANT FACTS RELATING TO THE PROJECT.  BUYERS ARE URGED TO READ ALL CONDOMINIUM DOCUMENTS CAREFULLY AND TO ENGAGE A LAWYER OR OTHER ADVISOR IN CONNECTION WITH ANY DECISION TO PURCHASE A UNIT IN THE PROJECT.


EXHIBIT A

                        GOSHORN LAKE COTTAGE CONDOMINIUM ASSOCIATION

                                                  Estimated Annual Operating Budget*

2004

Operating Expenses:                                                             ANNUAL                   PER UNIT

Dues and Fees:

Lake Association Dues                                                                $600                           $25.00

 

Utilities (Office, Common, Mgr’s Apt.):

Electric                                                                                       1,000                            41.67

Telephone (Basic and Pager)                                                       1,280                            53.33

Water                                                                                         3,000                          125.00

Gas                                                                                             1,200                            50.00

Dumpster                                                                                       900                            37.50

                                                                                                      

Maintenance and Repairs:

Snowplowing                                                                                 400                            16.67

Port O John                                                                                   450                            18.75

Orkin                                                                                             630                            26.25

Supplies                                                                                      1,100                            45.83

Lawn Care/Misc. Yard and Trees                                               4,750                          197.92

Opening and Closing Cottages                                                        750                            31.25

Heating and Cooling (Yearly Inspection)                                         400                            16.67

 

Employees:

Manager (Plus Apartment and Utilities)                                        12,000                       500.00

Payroll Tax                                                                                   1,200                          50.00

 

General and Office Supplies (Pool, Flowers, etc.)                          2,000                          83.33

Insurance                                                                                      6,000                        250.00

Legal and Accounting                                                                    1,000                          41.67

Bank Charges                                                                                 120                             5.00 

 

Total Annual Maintenance Charge                                               $38,780                  $1,615.84

Per Month Maintenance Charge                                                                                    $135.00

 

Expected Income:

23 Units @ $135/month                                                              $38,880

 

 

*Estimated by RCNE, Inc., Developer, on the basis of 23 occupied units.


EXHIBIT B

 

                                                          DEVELOPMENT TEAM

                                                                                                        Previous

                                                                                                    Condominium

Function                  Name and Address                                                                         Experience

 

Developer                RCNE, Inc.                                                                                        None

                               3581 – 65th Street                                                                                 

                               Saugatuck, MI  49453

 

Management            RCNE, Inc.                                                                       Goshorn Lake Resort

Agent                      3581 – 65th Street

                               Saugatuck, MI  49453

 

Rental                      RCNE, Inc.                                                                       Goshorn Lake Resort

Agent                      3581 – 65th Street

                               Saugatuck, MI 49453

                              

Escrow                    Chicago Title Insurance Company                                                   Numerous

Agent                      213 Hubbard Street, P.O. Box 206

                               Allegan, MI  49010

 

Project                    Nederveld Associates, Inc.                                                              Numerous

Engineer                  5570 – 32nd Avenue, P.O. Box 10

                               Hudsonville, MI  49426

 

Project                    Varnum, Riddering, Schmidt & Howlett

Aattorney                Bridgewater Place - P.O. Box 352

Grand Rapids, MI  49501-0352

 


EXHIBIT C

 

RULES AND REGULATIONS OF THE

GOSHORN LAKE COTTAGE CONDOMINIUMS

 

 

1.         Until otherwise agreed upon, the units will be opened up (water turned on) during the first week of April.  The units will be winterized during the last week of October.  The cost of this will be included in the monthly maintenance fee.

 

2.         Unit owners will be responsible for the maintenance of the exterior and interior of their units including walls, carpet, furniture and appliances.  Owners will be encouraged to plant flowers and keep up their immediate yard appearance.

 

3.         During ownership occupancy of the unit, the number of occupants shall not exceed more than two over what the beds would normally sleep in that unit.  During rental occupancy, the occupants shall not exceed the number that the beds would normally sleep.

 

4.         Owners and renters will at all times abide by the hand out sheet of resort rules and regulations including, but not limited to, quiet time, pets, rowboats, linen exchange and use of all recreational facilities.

 

5.         Pets will only be allowed in units where an owner of the unit is in residence.  Owner is described as meaning the name(s) on the recorded deed of the unit.  This excludes relatives and friends.  No other pets will be allowed on the resort property at any time.

 

6.         No travel trailers, motor homes or tents may be located on the resort property at any time. Boat and utility trailers may be temporarily parked in the designated areas only.

 

7.         All units must maintain a clean and attractive appearance.  No exterior storage of articles except what would normally be associated with lakefront vacationing, such as pool and water toys, beach chairs, bicycles, etc.  No external garbage cans may be used.  Dumpster is provided for household refuse only.

 

8.         Manager duties at the resort will be described as, but not limited to:  Pool cleaning, beach clean up, flower and grass watering within reason, oversee the general maintenance of all common areas, office operation including paying bills, reading gas meters, assisting owners with any problems or questions they may have, report to the association board with up to date bookkeeping totals, and give any suggestions that would increase safety or efficiency of the resort operation.

 

9.         Two additional properties on 65th Street north of Blue Star Highway will be given deeded access to use the beach and pool area of Goshorn Lake Cottage Condominiums for a specified access fee.  The fee will be determined by the board of the association.  Properties that will receive deeded access will be 3565 and 3567 65th Street.  The number of guests from each property that will be allowed to use the facilities at any one time will be specifically noted and any misuse will result in the loss of use.  Access to the facilities will be limited to the stated roadways and paths.  Additional homes located on 65th Street north of Blue Star Highway can be, at the discretion of the association board, considered for the same pay-for-use arrangement.  All properties using the facilities through access fees must follow all rules and regulations of the association.

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10.       Additions and changes to the interior of the units will be up to the local building inspector. Additions and changes to the outside of the units will be up to the discretion of the association board and limited by the local zoning and building ordinances.

 

11.       General liability insurance covering the condominium units and the grounds of the resort will be kept by the association.  In addition, a one million dollar umbrella policy will be purchased.  Owners are encouraged to have contents policy for their unit along with separate liability insurance sufficient to cover any large catastrophe that would be divided among the owners above and beyond the association coverage.

 

12.       The association will maintain 4 rowboats for use at the beach with corresponding oars and life jackets.  In addition, the association will maintain 40 lounge or adirondack chairs at the beach and 30 lounge chairs at the pool.  Developer will have these items in place prior to the association’s responsibility.  The association will be responsible for maintaining the yard recreation facilities, ie: sandboxes, swings, shuffle board, volleyball, basketball, horseshoes and their related equipment.

 

13.       The entire water bill be paid for from the association maintenance fees.  The rental management company will pay an additional 10% of the water bill that is due for the second and third quarters of the year.  The rental management company will also pay the electric and gas bill for the use of the office area.  Each owner will be responsible for their own unit’s gas and electric bill.

 

14.       All units with a fireplace will be required to pay a $30 a year firewood fee for hardwood.  When supplies are depleted, additional funds will be assessed.  The association will be responsible for maintaining a supply of firepit wood for the beach area.