Dear Member,

TABLE OF CONTENTS

Section I

YOUR COOPERATIVE...

Who's in Charge? 6

Board of Directors 6

Committees 6

Corporate Documents 6

Membership Certificate 6

Tax Benefits 7

Insurance 7

Federal Housing Administration Management 7

Management 8

Deliveries 8

Monthly Charges 8

Maintenance 9

Maintenance – Emergencies 9

Exterminating Service 10

Grounds 10

Play Areas 10

Section II

YOUR TOWNHOUSE

Air Conditioners ... 11

Attic Space ... 12

Basements ... 12

Basement Partitions..12

Cable Television..12

Carpet…..12

Doors…13

Door s - Closet…13

Door Locks – Bathrooms ...13

Dryer Vents….13

Electrical Distribution Panel...13-14

Fans – Bathroom...14

Floors…..14

Garbage Disposal..15.

Heating...14

Hot Water...15

Keys...16

Kitchen Fixtures..16.

Plumbing...16

Ranges & Refrigerators...16-17

Recycling….17

Rubbish...17

Satellite Dishes….17

Saving Money…17

Security…..17

Snow Removal...18

Stairs...18

Storms & Screens...18

Sump pumps….18

Television...19

Wall Tile...19

Walls ‑ Interior...19

Water. .19

Windows …19

Window Treatments….19

Section III

POLICIES

ADDITIONAL CHARGES AND COLLECTION POLICIES...20

Late Charges & NSF Checks...20

Payment Application policy..21

Current Member's Receivables...21

Former Member's Receivables...21

Recertification and Surcharges...22

ANNUAL MEETING GUIDELINES….23

Proxy Votes...23

Registration...23

Voting………..23

CARBON MONOXIDE POLICY…..24-26

COMMUNITY BUILDING USE POLICY..27-28.

COMPLAINTS...29

GARDENING...29-30

IMPROVEMENTS...31

Washers & Dryers..31.

Property Improvements ‑ Reimbursement …31

Outside Structures….31

Alteration & City Ordinance…31

LETHAL WEAPONS POLICY…31-32

MOVING/TRANSFER POLICIES…33

Move‑in/Move‑out Policy ... 33

Move‑out ‑ General Information ...33-34

Key Return at Move‑out ... 34

Transfers ... 34

Move‑out Policy ‑ Condition of Unit ... 34-35

Carpeting and other Non‑Standard conditions ...36

PARKING/VEHICLE USE POLICY...40-42

PET POLICY ... 43-45

REFURBISHING ... 46

REGULATIONS FOR FENCES, DECKS, AND PATIOS…..37-39

SMOKE DETECTOR POLICY……47

SERVICE DEPARTMENT AND EMPLOYEE POLICIES ... 48

Treatment of Cooperative Employees... 48

Service Department Policy ... 48

Service Department Entry Policy ...48

Lockouts...49

SOLICITING AND FLYER DISTRIBUTION ...49

UNIT CONDITIONING: RESPONSIBILITIES OF CURRENT MEMBERS…49

Section IV

MISCELLANEOUS POLICIES…..50-51

BB Guns...

Curfew Hours

Family Composition

Fireworks...

Member's Handbook...

Parking Lot Play

Property Damage...

Policy Updates...

Rejection of Membership Applications

Sign Posting Prohibition

Section V

YOUR COMMUNITY

Government...

Voting ...

Schools ...

Library ...

Post Office ...

Hospitals ...

Shopping ...

Parks & Recreation

APPENDICES:

Appendix A: Cooperative By-Laws

Appendix B: Regulatory Agreement

Appendix C: Your Occupancy Agreement

Board of Directors

A five-member Board of Directors sets the policies of the Cooperative. This Board is elected by you and the other members at the Annual Meeting that is held every September. The Board of Directors is charged with the duty of administering the affairs of the Cooperative and has, among others, the following powers:

1. To accept or reject applicants for membership;

2. To approve an operating budget and establish monthly carrying charges;

3. To retain an agent to carry out policies set by the Board and Federal Housing Administration requirements;

4. To terminate membership and occupancy rights for cause;

5. To publish rules and regulations deemed proper and beneficial for the Cooperative.

Articles V and VI of your By-Laws contain comprehensive information on Directors and officers of your Cooperative.

All Co‑op members are invited to attend the regular open meetings of the Board, and are encouraged to bring to the Board questions or suggestions that they may have concerning Co‑op policies.

Committees

The Board President may establish committees that report to the Board of Directors on policy matters and to perform other important functions. The standing committee of the Cooperative is:

The Membership Committee: their duties, as specified by the Board, are

(1) to welcome new members and orient them to Cooperative membership, and

(2) to act upon all applications for membership by approving prospective members or recommending evaluations by the Board.

Committees may be set up to conduct research on a particular situation and make recommendations to the Board of Directors. Various committees that have been formed are the Pet Committee, Neighborhood Watch, Vehicle & Parking Committee, and the Mortgage Payoff Committee. The Cooperative urges all members to serve on any committees that interest them.

Corporate Documents

Your Member's Handbook contains the Occupancy Agreement, By‑Laws, the Regulatory Agreement and other corporate documents.

Copies of the Minutes of the most recent Board meeting are available at the monthly Board meeting, the office, on-line at www.universitytownhouses.org and, weather permitting, are distributed to each unit.

Minutes of past Board of Directors meetings, monthly cash flow reports, copies of the annual audit, etc., are available to interested members upon request. A small fee may be charged to cover the copying cost.

Membership Certificate

Be sure to safeguard your membership certificate because it is evidence that you are a member of the University Townhouses Cooperative. Your Member's Handbook is a good place to keep your certificate. If it is lost, destroyed or stolen, please report this to the Resale Office. Your membership certificate must be returned to the Cooperative when you submit your Withdrawal Notice.

Tax Benefits

You may deduct for Federal Income Tax purposes the portion of your carrying charges that were used for real estate taxes and mortgage interest. The long form with itemized deductions must be used. You may be able to deduct part of the portion of your carrying charges, which was used to pay property taxes from your state tax. The amount you save in taxes will depend on your income, your other deductions, your family status, and the amount of carrying charges paid during the year.

Before February 1 of every year, the Cooperative's accounting firm will furnish the office with a statement of allowable deductions, which you may attach to your tax return. The management office will have this information distributed door‑to‑door and extra copies will be available for pickup at the office. The information will also be posted on the Cooperative’s website at www.universitytownhouses.org.

Insurance

The Cooperative provides a wide range of insurance protection. However, there are some areas that cannot be included in the Cooperative's insurance. The fire and extended coverage insurance policy does not cover your personal belongings such as furniture, carpets, draperies, nor does it include living‑out expenses if your townhouse is extensively damaged. The liability policy does not cover accidents that occur in your townhouse or those caused by your negligence. To cover these areas, you should purchase a renter's insurance policy.

Federal Housing Administration

Under section 221(D) 3 of Title II of the National Housing Act, FHA insures the lending institution against loss by any reason of any default of the Cooperative in its obligations under the mortgage. FHA does not insure the members of the Cooperative against loss, nor does it handle the funds of the Cooperative. FHA's role is an advisory and regulatory one, furnishing technical advice and assistance.

FHA must approve the management contract that the Cooperative signs with an approved professional management agent. The Cooperative must build up reserve funds as required by FHA for the replacement of equipment and structural components as they wear out and for other contingencies. FHA must also approve the Cooperative’s annual operating budget. Relations between FHA and the Cooperative are governed by the Regulatory Agreement (refer to the back of this book).

Management

The day‑to‑day business affairs of your Cooperative are the responsibility of the Manager, whose duties are set forth in a management agreement, and which includes the following:

1. Maintaining the buildings and grounds in accordance with the standards set by the Board of Directors;

2. Hiring, training, and supervising the maintenance personnel necessary to maintain the standards set by the Board;

3. Collecting all monthly carrying charges and taking legal action against delinquent members, such action being reported to the Board;

4. Managing the Cooperative's funds in a safe and business‑like manner, keeping books of accounts for all funds entrusted to it, and preparing monthly statements of receipts and disbursements;

5. Encouraging cooperative spirit and member participation;

6. Working with the Cooperative's auditor to prepare all necessary governmental forms;

7. Maintaining a current list of prospective members to prevent the Cooperative from suffering vacancy losses;

8. Advising the Board on governmental regulations regarding cooperatives and the insurance, maintenance, and fiscal needs of the Cooperative;

9. Preparing an annual budget each year for review, revision, and approval by the Board of Directors and FHA.

This list is not all‑inclusive but does include some of the more important and more visible activities and functions of the manager.

Deliveries

The Cooperative cannot be responsible for accepting delivery of merchandise or other parcels for individual members. If you do not expect to be home when a delivery is to be made, you might try to have a neighbor receive it. Due to the size of the Cooperative, the office or service department is not able to deliver personal messages, notes, or mail.

Monthly Carrying Charges

Your monthly carrying charges are due and payable on the first of each month. Please send payments in the form of a personal check, money order, cashier check, or bank draft. Absolutely no cash is accepted and the Cooperative is not able to accept credit card payments. Make your check or money order payable to UNIVERSITY TOWNHOUSES COOPERATIVE. Also, please indicate your address on your payment so your account may be properly credited. Payments can be mailed to the Cooperative or deposited in the payment box at the management office located at 3200 Braeburn Circle, Ann Arbor, MI 48108.

For full details on late charges, please refer to the Late Charges Policy (page______), which follows the general information section of the Handbook.

Maintenance

The Cooperative is responsible for the maintenance of the buildings and the grounds as well as for the repairs that may be needed in your townhouse.

Your service requests are recorded on work order forms and are handled in the order which they are received. Emergency situations endangering life or property are taken care of immediately. The length of time it takes to complete routine service requests depends on the workload at that time, the time of year, and the occurrence of emergency work. To assist you in determining if your work order or situation is considered an emergency, a list of emergency situations are defined in Appendix I. To place a service request, call the office or go on-line at www.universitytownhouses.org and give your name, address, and a description of the repair needed. Please do not stop an employee on the grounds, or impose on them at their homes or elsewhere and ask to have work done.

The regular working hours for the service department is from 8:30 a.m. to 4:30 p.m., Monday through Friday. If you are not at home when the maintenance person arrives, a notice is left and your service request is held until you call again, unless you have given permission for the employee to enter your townhouse in your absence. If the member is not at home for a pre‑arranged service call by an outside contractor, the member shall be charged the contractor's fee unless the member granted the contractor permission to enter the unit. In emergency situations, the service personnel may enter your townhouse without your advanced permission.

Services performed by the service staff are not "free" since they are partially paid for in the monthly carrying charges. If you make minor repairs and adjustments yourself and help keep the grounds clean; your Cooperative's costs will be kept to a minimum.

Maintenance Service - Emergencies

The Cooperative has an answering service to respond to emergencies service requests. The service persons work Monday through Friday, 8:30 am to 4:30 PM. An on-call person is available for after office hour’s emergencies. Since everyone perceives the definition of an emergency differently, here is a list of what University Townhouses Cooperative considers an emergency:

¨ No electrical power to the townhouse;

¨ Lock outs;

¨ No power to the stove (one malfunctioning burner is not an emergency);

¨ Water system leaks that, if left until the next workday, will cause structural damage or destruction to the members’ personal possessions;

¨ Toilet not working (in a three-bedroom unit, if one toilet is working, it is not an emergency;

¨ Catastrophic emergency (fire, explosion, etc.);

¨ Sewer back up;

¨ Gas leaks;

¨ Water heater not working;

¨ Frozen pipes;

¨ Inability to secure unit (because of a broken lock or window;

¨ Any item left outside a unit that constitutes a clear and present danger to individual, animal, or property;

¨ Emergency towing under the following conditions:

F Vehicle is parked in a fire lane;

F Vehicle is parked within 15 feet of a fire hydrant;

F Vehicle is parked in such a manner as to create a public hazard or to obstruct pedestrian or vehicular traffic;

F Vehicle is parked in a member’s numbered parking spot.

Please call all other service requests to the management office first thing in the morning when possible. If the office is not open, you can leave a message on voice mail, drop a note in the payment box, or E-mail at www.universitytownhouses.org. Your cooperation in calling in work orders will help the service department respond to your needs more efficiently.

Exterminating Service

We encourage members to handle localized problems themselves. However, should you continue to be bothered by insects or rodents around your townhouse, please call the office. It is helpful to have a sample of the insect so we can assist you in treating the problem. It may be necessary to be placed on the schedule for pest control service.

The Cooperative Extension Service can provide you with useful information on the extermination of ants, silverfish, fleas, earwigs, and other pests. Based on the situation, exterminating services may be charged to your account.

(Please refer to UNIT CONDITION under Policies, page ______.)

Grounds

The manager arranges for ground maintenance by the service department and outside contractors. Services include grass cutting, grounds care, snow removal, and general cleaning.

Members are urged to help keep the Cooperative attractive and clean. You may plant flowers and shrubs in designated areas at your townhouse, in accordance with the Gardening Policy. It is the responsibility of the member to keep the area around his/her townhouse free of debris and weeds, and maintained in a neat and clean condition. Please refer to the Gardening Policy on page ______.

Play Areas

Play areas are conveniently located throughout the Cooperative and are equipped with benches and play equipment. Please report broken or defective equipment to the office. For the safety of all children, and to prevent damage to vehicles, they are not allowed to play on the main circle or in parking lots.