1. Summary: This Dues Collection Policy ("Policy") describes procedures used when a homeowner does not send dues in on time, describes an appeals process for homeowners who disagree with the calculation of dues or penalties for late payment, references the Riverwalk Homeowners Association ("Association") Bylaws section that authorizes the Policy, and provides examples of how penalties for late payments will be calculated.

2. Why Dues Are Collected: Association dues pay for several expenses: lawn and common area maintenance, liability insurance, postage and printing, office supplies, Board meeting room rental, replacement supplies and plants for common areas, utilities for watering common areas, legal and accounting fees, and miscellaneous licenses, permits and taxes. The timely receipt of dues allows the Association to pay its bills on time, avoids unnecessary bookkeeping, and minimizes extra postage and mailings to remind homeowners of late payments. The Association exists for the good of all homeowners and late payments undermine the effectiveness of the Association and increase its costs.

3. Late Fees: Monthly dues are payable of the first of each month for that month. Dues are late if payment is not received by the 20th of the month (or the first business day after the 20th if the 20th falls on a holiday or Sunday). For example, October 2007 dues are payable on October 1, 2007 and are considered late if not received by end of day on October 20, 2007. The Association mailbox is checked five or six times a week. When a monthly payment is late, a 10% late fee will be added to the monthly dues amount. When a late fee is assessed, the homeowner will be notified via e-mail or US mail by the last day of the month in which the late fee is assessed.

4. Interest on Unpaid Balances: Interest will be charged on unpaid balances. For example, if a homeowner misses the October 2007 payment and has not paid the monthly dues and late fee by November 20, 2007, interest will charged for October's unpaid balance, where the unpaid balance is the sum of all outstanding dues, late fees, and interest. The monthly interest rate will be 1% of the unpaid balance. When interest is assessed, the homeowner will be notified via e-mail or US mail by the last day of the month in which interest is assessed.

5. Partial Payments: When homeowners submit partial payments of the amounts that the Association believes are owed, such partial payments will be dealt with on a case-by-case basis and in a way that generally assumes homeowners are trying to minimize late fees and interest. See Example 4 in the Appendix.

6. Billing Notifications: Homeowners may elect to receive monthly reminders from the Association that dues will soon be payable. Homeowners who opt for e-mail notification will receive a message near the end of the month that dues are to be paid on the first of the following month. Homeowners who prefer US mail notification will receive a letter in the same time frame. These monthly notifications are a courtesy only and simply remind homeowners that dues should be paid soon. These reminders will not state the full amount that may be owed if a homeowner is in arrears and will not acknowledge that a homeowner may have paid some months in advance. Shortly before the end of each calendar year, every homeowner will receive an annual statement documenting payment status as of mid-December and indicating when payments will be due for the coming year. During the year, homeowners may obtain payment status by contacting the Treasurer.

7. Appeals: If a homeowner disagrees with the Treasurer's accounting, the homeowner may document in writing what that disagreement is and send the document to the Treasurer. The Treasurer will respond in writing to the homeowner within 14 days of the receipt of a written statement of disagreement. If this response from the Treasurer does not satisfy the homeowner, the homeowner may appeal in writing to the Association President. The President will arrange a timely meeting with the homeowner and the available Association officers. At this meeting, the Treasurer's position and the homeowner's position on the dues payments will be presented. The Association officers in attendance will evaluate the evidence presented and render a decision. If written information has been submitted by both the homeowner and the Treasurer, the absence of either the homeowner or the Treasurer need not preclude the officers from reaching a decision. This decision must be approved by a majority of the officers at the meeting; the Treasurer will not participate in this vote. The decision rendered is final. The officers may also vote to continue the appeal to a later date if they decide more evidence is needed.

8. Schedule: This Policy was approved by the Association Board on June 28, 2007 and goes into effect on August 1, 2007. During July 2007, each homeowner will receive a statement showing payments deposited by the Association. This statement is the basis for determining whether a homeowner's dues payments are current or not. A homeowner may appeal the information in this statement by following the procedures described in Section 7. Failure to correct the July 2007 statement by August 20, 2007 implies that the homeowner accepts the Treasurer's information. If new information comes to the attention of either the homeowner or the Treasurer after August 20, 2007, the two parties will attempt to agree on the meaning of the new information. A homeowner may appeal the Treasurer's interpretation of the new information by following the procedures described in Section 7.

9. Revisions to Dues Collection Policy: Over time, the Association may revise this Policy. New versions of the Policy will be distributed to homeowners in a timely manner. The fact that this or any future versions of the Policy might not spell out the Association's procedures for imposing liens against individual homeowners who are delinquent in their dues does not waive the Association's future right to impose such liens to the full extent of the law.

Appendix:

Riverwalk Homeowners Association Bylaws:
Section 5.6. Default. Failure by an Owner to pay any assessment of the Association shall be a default by such Owner of his or her obligations pursuant to these Bylaws and the Oregon Planned Community Act. In addition to the interest that may be charged on delinquent assessments, the Board of Directors, at its option, may impose a late charge penalty in respect to any monthly assessment not paid within ten (10) days from the due date. Such penalty may not exceed the sum of ten percent (10%) of the monthly assessment. The Association shall be entitled to a lien that may be enforced upon compliance with the provisions of the Oregon Planned Community Act. In any foreclosure suit by the Association with respect to such lien, the Association shall be entitled to collect reasonable rent from the defaulting Owner for the use of his or her Lot or shall be entitled to the appointment of a receiver. Any default by the Owner in any provisions of these Bylaws or of the Oregon Planned Community Act shall be deemed to be a default by the Owner of any mortgage to which the Owner is a party or to which the Lot is subject.

Examples: (These examples assume that monthly dues are $55.)

Example 1. Owner A does not pay dues for September by the 20th of the month. Owner A is assessed a late fee of 10%, or $5.50. By September 30, the Treasurer will send Owner A a statement showing an outstanding balance of $60.50 for September.

Example 2. Owner A from Example 1 does not pay September or October dues by the 20th of October. Owner now owes $60.50 for October (late fee assessment plus monthly dues) but also owes interest of 1% on the unpaid September balance or $.60. By October 31, the Treasurer will send Owner A a statement showing an outstanding balance of $60.50 for October and $61.10 for September for a total of $121.60.

Example 3. Owner B has not paid any dues for 2007. The Dues Collection Policy goes into effect on August 1, 2007 but no payment is received from Owner B by August 20. Owner B is assessed a late fee for August and interest is charged on the outstanding balance for the months of January through July. By August 31, the Treasurer will send Owner B a statement showing an outstanding balance of $449.35. This balance is the sum of $385 (7 months unpaid dues) plus 1% interest on $385 ($3.85) plus the $60.50 owed for the missed August payment. If the September payment is also missed and the previous outstanding balance is not paid, 1% interest will be charged on the outstanding balance of $509.85 ($449.35 plus $60.50) and the September payment is now $60.50.

Example 4. Owner C does not pay $55 dues for September by the 20th of the month. Owner C is assessed a 10% late fee or $5.50. By September 30, the Treasurer will send Owner C a letter showing an outstanding balance of $60.50 for September. On October 15, Owner C submits a check for $55. The Association will assume this $55 payment is for October and is not a partial payment of the missed September dues. Interest will be charged on the unpaid September balance of $60.50. By October 31, the Treasurer will send a statement to Owner C showing an outstanding balance of $61.10.