WHEREAS, Article V, Section 3 of the Declaration of Covenants, Conditions and Restrictions ("Declaration") established an initial maximum annual assessment rate of $120.00 per lot; and

WHEREAS, Article V, Section 3(a) of the Declaration empowers the Board of Directors to increase the maximum Annual General Assessment each year by the rise in the Consumer Price Index (CPI) or five percent (5%) of prior year's assessment, whichever is greater and that such increases shall become effective on January I of the next fiscal year;

WHEREAS, the Board of Directors believes that it is in the best interest of the Association to provide automatic increases in the maximum annual assessment in order to address contingencies and to maintain fiscal flexibility to properly insure and maintain the common area and administer the Association operations;

NOW, THEREFORE, BE IT RESOLVED THAT:

On January 1st of each year, the maximum annual assessment shall automatically increase by five percent (5%) over the previous Fiscal Year's maximum annual assessment;

Such automatic increases in the maximum annual assessment shall occur without the necessity of subsequent Board resolution and shall remain in effect until or unless the Board of Directors expressly resolves otherwise; and

Without regard to the automatic increases, the actual annual assessment will continue to be set annually by the Board in accordance with the estimated needs of the Association operations but may not exceed the maximum annual assessment except with the approval of the membership as set forth in the Declaration.

Resolution adopted and approved by the Board of Directors of Fair Oaks Estates Homeowners Association this 6th day of September, 2001.

/S/ Arthur E. Treiber, President