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                                                                    EXHIBIT 10.1

                                CRIT-VA III, INC.

                            ARTICLES OF INCORPORATION

                                    ARTICLE I
                                      Name

         1. Name. The name of the Corporation is CRIT-VA III, Inc.
            ----


                                   ARTICLE II
                                     Purpose

         2. Purpose. Notwithstanding any provision hereof to the contrary, the
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following shall govern: The business, operations and purposes of the Corporation
are limited solely to the following:

            (a) To acquire from Cornerstone Realty Income Trust, Inc., a
Virginia corporation, that certain parcel of real property listed in Article
VIII hereof, together with all improvements located thereon (the "Property");

            (b) To own, hold, sell, assign, transfer, operate, lease, mortgage,
pledge and otherwise deal with the Property; and

            (c) To exercise all powers that are enumerated in the Virginia Stock
Corporation Act and that are necessary or convenient for the business,
operations or purposes of the Corporation as set forth herein.

                                   ARTICLE III
                                  Prohibitions

         3. Certain Prohibited Activities. Notwithstanding any provision hereof
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to the contrary, the following shall govern:

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                  (a) The indebtedness of the Corporation shall consist only of
a first lien mortgage on the Property arising from financing by First Union
National Bank (the "Mortgage"), any other indebtedness permitted under the
Mortgage, and normal trade accounts payable in the ordinary course of business.
For so long as any obligation secured by the Mortgage remains outstanding and
not paid in full, the Corporation shall not incur, assume, or guaranty any
indebtedness not permitted hereunder.

                  (b) The Corporation shall not consolidate or merge with or
into any other entity, or convey or transfer its properties and assets
substantially as an entirety to any entity, unless:

                      (i) the entity that is formed upon such consolidation,
that survives such merger (if other than the Corporation), or that acquires by
conveyance or transfer the properties and assets of the Corporation
substantially as an entirety, shall: (A) be organized and existing under the
laws of the United States of America or any State or the District of Columbia,
(B) include in its organizational documents the same limitations set forth in
this Article III and in Article VII (Separateness Covenants), and (C) expressly
assume the due and timely performance of the Corporation's obligations; and

                      (ii) immediately after giving effect to such transaction,
no default or event of default will have occurred under any agreement to which
the Corporation is a party.

                  (c) For so long as any obligation secured by the Mortgage
remains outstanding and not paid in full, the Corporation shall not voluntarily
commence a case with respect to itself, as debtor, under the Federal Bankruptcy
Code or any similar federal or state statute without the unanimous consent of
the Board of Directors. For so long as any obligation secured by the Mortgage
remains outstanding and not paid in full, no material amendment to these
Articles of Incorporation or to the Corporation's Bylaws may be made without the
prior approval of the mortgagee holding the Mortgage.

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                                   ARTICLE IV
                                Authorized Shares

         4.1. Number and Designation. The number of shares the Corporation is
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authorized to issue is set forth below, together with the designation thereof
and the par value per share:

              Number of Shares  Class DesignationPar  Value Per Share
              ----------------  --------------------  ---------------

              5,000             Common                no par value

         4.2  Preemptive Rights. No holder of outstanding shares shall have any
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preemptive right with respect to: (a) any shares of any class of the
Corporation, whether now or hereafter authorized; (b) any warrants, rights or
options to purchase any such shares; or (c) any obligations convertible into any
such shares or into warrants, rights or options to purchase any such shares.

         4.3  Voting and Distributions. The holders of the Common Shares shall
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have unlimited voting rights and shall be entitled to receive the net assets of
the Corporation upon the liquidation of the Corporation, its dissolution or the
winding up of its affairs.

                                    ARTICLE V
                       Initial Registered Office and Agent

         5.1  Initial Registered Office. The initial registered office of the
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Corporation is located in the City of Richmond, Virginia, at the following
address:

                                    McGuireWoods LLP
                                    One James Center
                                    901 East Cary Street
                                    Richmond, Virginia  23219

         5.2  Initial Registered Agent. The initial registered agent of the
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Corporation is Martin B. Richards, Esquire, whose business office is identical
with the initial registered office and who is a resident of Virginia and a
member of the Virginia State Bar.

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                                   ARTICLE VI
                     Limit on Liability and Indemnification

         6.1 Limit on Liability. To the maximum extent that the Virginia Stock
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Corporation Act, as it exists on the date hereof or may hereafter be amended,
permits elimination of, or limitations upon, the liability of a director or
officer of a corporation, the directors and officers of the Corporation shall
have, as applicable, no liability or limited liability to the Corporation or its
shareholders.

         6.2 Indemnification, Advancement of Expenses and Related Matters.
             ------------------------------------------------------------

             (a) The Corporation, in accordance with the mandatory
indemnification provisions of the Virginia Stock Corporation Act, shall
indemnify a director who entirely prevails in the defense of any proceeding to
which he was a party because he is or was a director of the Corporation against
reasonable expenses incurred by him in connection with the proceeding. An
officer of the Corporation shall be entitled to such mandatory indemnification
to the same extent as a director.

             (b) In addition to any mandatory indemnification, the Corporation
shall provide the maximum indemnification permitted by law to any director,
officer, employee or agent of the Corporation in connection with any proceeding
(including any proceeding by or in the right of the Corporation) that is brought
against such person and that is based on the actions taken or not taken by such
person on behalf of the Corporation, or on the status of such person as a
director, officer, employee or agent of the Corporation, except to the extent
that such person has engaged in (i) willful misconduct, or (ii) a knowing
violation of the criminal law.

             (c) The provisions of this Article shall not be deemed to prevent,
deny or limit (i) the indemnification or insurance permitted under applicable
law to the directors, officers, employees or agents of the Corporation, or (ii)
the authority of the Corporation under applicable law to advance, reimburse or
pay expenses for the benefit of any director, officer, employee or agent.

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             (d) The determination of whether the Corporation is required or
permitted, in a particular case, to indemnify a director, officer, employee or
agent (or to provide such person with related advances, reimbursements or other
payments of expenses) shall be conducted in accordance with Section 13.1-701 of
the Virginia Stock Corporation Act, or any successor provision.

         6.3 Mandatory Subordination. Notwithstanding any provision hereof to
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the contrary, the following shall govern: Any indemnification shall be fully
subordinated to any obligations of the Corporation in regard to the Property and
shall not constitute a claim against the Corporation in the event that cash flow
is insufficient to pay such obligations.

         6.4 Amendments. No amendment, modification or repeal of this Article
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shall diminish the rights provided hereunder to any person arising from conduct
or events occurring before the adoption of such amendment, modification or
repeal.

                                   ARTICLE VII
                             Separateness Covenants

         7.1 Separateness Covenants. Notwithstanding any provision hereof to the
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contrary, the following shall govern: For so long as any obligation secured by
the Mortgage remains outstanding and not paid in full, in order to preserve and
ensure the Corporation's separate and distinct corporate identity, in addition
to the other provisions set forth in these Articles of Incorporation, the
Corporation shall conduct its affairs in accordance with the following
provisions:

             (a) It shall establish and maintain an office through which its
business shall be conducted separate and apart from those of its parent and any
affiliate and it shall allocate fairly and reasonably any overhead for shared
office space.

             (b) It shall maintain separate corporate records and books of
account from those of its parent and any affiliate.

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                  (c) Its Board of Directors shall hold appropriate meetings, or
act by unanimous consent, to authorize all appropriate corporate actions and
shall observe all corporate formalities in authorizing such actions.

                  (d) It shall not commingle assets with those of its parent or
any affiliate.

                  (e) It shall conduct its own business in its own name.

                  (f) It shall maintain financial statements separate from its
parent and any affiliate.

                  (g) It shall pay any liabilities out of its own funds,
including salaries of any employees, rather than funds of its parent or any
affiliate.

                  (h) It shall maintain an arm's length relationship with its
parent and any affiliate.

                  (i) It shall not guarantee or become obligated for the debts
of any other person or entity (including, without limitation, its parent or any
affiliate) and shall not hold out its credit as being available to satisfy the
obligations of others.

                  (j) It shall use stationery, invoices and checks separate from
its parent and any affiliate.

                  (k) It shall not pledge its assets for the benefit of any
other person or entity (including, without limitation, its parent or any
affiliate).

                  (l) It shall hold itself out as an entity separate from its
parent and any affiliate.

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                  (m) It shall not make any loans or advances to any third party
(including, without limitation, any affiliate).

                  (n) It shall comply with its obligations under the agreements
and instruments evidencing the Mortgage.

         7.2      Definitions.  For purpose of this Article VII, the following
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terms shall have the indicated meanings:

                  (a) "affiliate" means, with respect to a specified person or
entity:

                      (i)   any person or entity directly or indirectly owning,
controlling or holding, with power to vote, ten percent (10%) or more of the
outstanding voting securities or interests of the specified entity;

                      (ii)  any person or entity ten percent (10%) or more of
whose outstanding voting securities are directly or indirectly owned, controlled
or held, with power to vote, by the specified person or entity;

                      (iii) any person or entity directly or indirectly
controlling, controlled by or under common control with the specified person or
entity;

                      (iv)  any officer, director or partner of the specified
person or entity;

                      (v)   if the specified person or entity is an officer,
director or partner, any company for which the specified person or entity acts
in any such capacity; and

                      (vi)  any close relative or spouse of the specified
person.

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             (b) "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
person or entity, whether through ownership of voting securities, by contract or
otherwise.

             (c) "parent" means, with respect to a corporation, any other
corporation owning or controlling, directly or indirectly, fifty percent (50%)
or more of the voting shares of such corporation.

             (d) "person or entity" includes any individual, corporation,
partnership, limited liability company, joint venture, association, joint stock
company, trust (including any beneficiary thereof), unincorporated organization,
government or any agency or political subdivision thereof.

                                  ARTICLE VIII
                                    Property

         8.1 The Property consists of the real property, together with all
improvements thereon, that is located at the following address (and which is
more fully described in agreements and instruments evidencing the Mortgage):

         Tradewinds Apartments
         255 Floyd Thompson Blvd.
         Hampton, Virginia  23666




Dated:   June 8, 2001

                                                By: /s/ William D. James
                                                    ----------------------------
                                                    William D. James,
                                                    Incorporator

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