REPORT EXPLANATIONS

NATURAL HAZARDS DISCLOSURE STATEMENT

Special Flood Hazard Areas

The Federal Emergency Management Agency (FEMA) has prepared Flood Insurance Rate Maps, which delineate flood zones based on estimated flood risk. The zones pertinent to the Natural Hazard Disclosure are Zone A and V (Special Flood Hazard Areas). Zone V is for coastal areas and Zone A is for inland areas. These zones are located within 100-year flood plain. A 100-year flood has a one-percent chance of occurrence in any given year. Flood insurance is required by federally regulated lending institutions for the properties located within Zones A or V. Local flood control projects to mitigate flood hazard potential can change the flood risk of a specific area or property. The flood risk of a specific area or property may be updated through a Letter of Map Change filed with FEMA. Specific updated flood risk information, not included on the Flood Insurance Rate Maps, is not provided in our report. If a property is located within a Special Flood Hazard Area, Zone Disclosures, Inc. recommends contacting FEMA for the updated risk assessment of the property and the current flood insurance requirements. It should be noted that properties within a Special Flood Hazard Zone may never experience flooding, and conversely, properties not located within a Special Flood Hazard Zone may experience flooding. This disclosure is not meant to predict flooding, but rather to identify properties for which flood insurance may be required by federally regulated lending institutions.

Areas of Potential Flooding from Dam Failures

The California Office of Emergency Services (CA OES) has provided Inundation Maps, which delineate areas subject to flooding from a sudden, catastrophic failure of a dam with a full reservoir. Maps are not available for all dams in the state. Additional maps may become available subsequent to approval by OES. Inundation from reservoir, dam, or dike failure can pose serious risks to large segments of the population. Cities and counties within the mapped areas are required to adopt emergency procedures for the evacuation of populated areas.

Very High Fire Hazard Severity Zones

The California Department of Forestry and Fire Protection (CDF) under the Bates Bill (AB 337) established Very High Fire Hazard Severity Zones (VHFHSZ) in the Local Responsibility Areas (LRA) of California. The maps prepared by the CDF shows zones based on State criteria. Local agencies, by law, are allowed to make changes to the zones. Fire defense improvements are mandated for properties located within the zones under section 51182 of the Government Code. Mandated improvements include a Class A roof for new development or replacement of an existing roof and brush clearing within 30 feet of a structure. For a complete listing of the mandated fire defense improvements and local zone changes, contact the local fire department.

The Very High Fire Hazard Severity Zone Maps were prepared at a scale that does not always allow a conclusive determination to be made at zone boundaries. If a conclusive determination cannot be made, the property will be reported on the Natural Hazard Disclosure Statement as boundary condition on our Residential Disclosure Report. Therefore, the local fire department should be contacted to determine if the property is located within the zone.

State Fire Responsibility Area

The California Department of Forestry and Fire Protection has established State Responsibility Areas (SRA) for which the primary financial responsibility for prevention and suppression of fires is that of the State. However, the State is not responsible for protecting structures within these areas. The property owner is subject to certain maintenance requirements and may be responsible for fire protection of structures under Section 4291 of the Public Resources Code. IF the property is located within a State Responsibility Area, Zone Disclosures, Inc. recommends contacting the county fire department to obtain a full listing of property owner maintenance and fire protection requirements. Public Resources Code Section 4326 reads, “A seller of a real property which is located within a state responsibility area determined by the board, pursuant to Section 4125, shall disclose to any prospective purchase the fact that the property is located within a wildland area which may contain substantial forest fire risks and hazards and is subject to the requirements of Section 4291.”

The State Responsibility Area Maps were prepared at a scale that does not always allow a conclusive determination to be made at zone boundaries. If a conclusive determination cannot be made, the property will be reported on the Natural Hazard Disclosure Statement as situated in the zone as mandated by Section 1002.6C of the California Civil Code. Zone Disclosures, Inc. will report the property as in a boundary condition on our Residential Disclosure Report. The county fire department should be contacted to determine if the property is located within the zone.

Alquist-Priolo Earthquake Fault Zones

The state geologist under the Alquist-Priolo Earthquake Fault Zoning has established regulatory zones around the mapped surface traces of active faults. These zones, typically one-quarter mile or less in width, have bee delineated on maps around “sufficiently active and well-defined” faults and fault segments that “constitute a potential hazard to structures from surface faulting or fault creep.” Faults that demonstrate movement during the past 11,000 years are considered active. The purpose of the Act under Section 2621-2630 of the Public Resources Code is to assist cities and counties in land using planning and developing permit requirements. The State Mining and Geology Board provides additional regulations to guide cities and counties in their implementation of the law under California Code of Regulations, Title 14, Division 2. Local agencies must regulate most types of development projects located within the zones. The results of our search only indicate whether a property is situated within an Earthquake Fault Zone, as shown on the Alquist-Priolo Earthquake Fault Zone Maps. Our search does not indicate whether or not surface trace of an active fault is located on the property. If this report indicates the subject property is located within an Earthquake Fault Zone , Zone Disclosures, Inc. recommends consulting a Certified Engineering Geologist to assess the site-specific potential for surface fault, rupture. It should be noted that the State Earthquake Fault Zoning Program is ongoing and properties currently not situated in a zone may be located in a zone established in the future.

Seismic Hazard Zones

The California Division of Mines and Geology under the Seismic Hazards Mapping Act has prepared maps delineating zones of potential seismic hazards. The legislation for the Act may be found in the California Public Resources Code, Division 2, Chapter 7.8, Sections 2690-2699.6 and Chapter 8 Article 10, Sections 3720-3725. The purpose of the Act is to provide cities and counties with zones where site-specific geo-technical studies are required prior to development. Local agencies must regulate most types of development projects located within the zones. The currently available Official Maps of Seismic Hazard Zones contains zones for the seismic hazards of liquefaction and earthquake induced land sliding for limited geographic areas only. However, future maps may contain additional seismic hazards and may cover the entire state. Our search indicates whether a property is situated or not situated within a mapped Seismic Hazard Zone. If the property is not located in an area mapped by the state Seismic Hazards Mapping Program, our report indicates that the map for the site has not yet been released by the State. Due to limitations of the state Seismic Hazards Mapping Program, Zone Disclosures, Inc. recommends hiring a Certified Engineering Geologist to address any concerns regarding the seismic hazard potential of the subject site.

The liquefaction Hazard Zones delineate areas where liquefaction has been recorded in the past and areas where local soil and groundwater conditions indicate a potential for permanent ground displacement from liquefaction that would require mitigation. Site specific geo-technical studies are required prior to new development. Liquefaction is a process whereby saturated, unconsolidated, sandy soils, temporarily become liquefied as a result of strong ground shaking.

Liquefaction is considered most likely when the ground water table is located less than 50 feet below the ground surface. Ground displacement may occur and buildings may be damaged as a result of liquefaction.

Earthquake-Induced Landslide Zones include areas where geologic materials are considered susceptible to slope failure during strong earthquake ground shaking. Also included are areas with identified past landslide movement and areas with known earthquake-induced slope failure during historic earthquakes. Site-specific geo-technical studies are required prior to new development.

It should be noted that the maps may not show all areas of potential liquefaction or earthquake-induced land sliding. In addition, the mapped areas within each zone will not be affected uniformly during an earthquake. As noted on the maps, “Liquefaction zones may also contain areas susceptible to the effects of earthquake-induced landslides. This situation typically exist at or near the toe of existing landslides, down slope from rock fall Or debris flow source areas, or adjacent to steep stream beds.”

SUPPLEMENTAL DISCLOSURES & ADDENDUMS

Military Ordnance Disclosure

California Civil Code d1102.15 requires the seller of residential real property to disclose whether any former federal or state ordnance locations were located within one mile of the subject property. For purposes of this law, “former federal or state ordnance locations” means an area identified by any agency or instrumentality of the federal or state governments as an area once used for military training purposes that may contain potentially explosive munitions.

Industrial Disclosure

The disclosure regarding the Subject Property’s proximity to a zone or district allowing manufacturing, commercial or airport use is based upon currently available public records and excludes entirely agricultural properties. A physical inspection of the Subject Property has not been made. The calculation of the one-mile proximity measurement is based upon the distance between the Subject Property’s street address and the street address of the next closet property allowing manufacturing, commercial or airport use; the one-mile proximity measurement is not based upon a line of site measurement of the properties (e.g., “as the crow flies”). Therefore, it is possible for the distance between the properties’ street addresses, the Subject property may be reported as not within one mile of a zone or district allowing manufacturing, commercial or airport use.

Airport Proximity Disclosure

This is not a noise (decibel level) disclosure and no disclosure is made regarding the proximity of private airports or landing strips. Rather, the airport proximity disclosure relates solely to the distance between the Subject Property’s street address and the current boundaries of a non-private airport. No physical inspection of the Subject Property or the airport has been made, and this report does not consider the impact of any planned or approved airport expansion projects or modifications. The calculation of the five-mile proximity measurement is based upon the distance between the Subject Property’s street address and present boundaries of the airport based upon currently available public records. Therefore, it is possible for the Subject Property to be located immediately adjacent to an airport, but because of the distance between the airport’s boundaries and the Subject Property’s street address, the Subject Property may be reported as not within five miles of the airport. No finding or opinion is expressed or implied in this report regarding the take-off and landing patterns utilized by airports or the noise levels experience at the Subject Property as a result thereof. Properties lying beneath or near airport take-off or landing routes often experience significant and disturbing noise levels notwithstanding that they are locat4ed more than five miles from the airport. In addition, take-off and landing patterns may change based upon weather conditions and airport expansion/modification projects.

Airport Influence Disclosure

No disclosure is made regarding the proximity or location of out of State airports, out of USA airports, private airports, landing strips, private communities catering to airplane commuters, heliports or bodies of water that permit take-off and/or landing of sea planes. Rather, The Airport Influence Area Disclosure relates solely to the location of the Subject Property’s street address and the current boundaries of an Airport Influence Area provided by the cognizant authorities of the County where the Subject Property is located.

If the cognizant governmental authorities have not adopted an influence area boundary for a particular public airport, then (in accordance with Section 21675.1(b) of the California Public Utilities code) the default “study area” includes all land within 2 miles of the airport boundary (not the runway). No physical inspection of the Subject Property or the airport has been made. For purposes of this disclosure, an “Airport Influence Area” also known as an “airport referral area” is the area in which current or future airport-related noise, over flight, safety, or airspace protection factors may significantly affect land uses or necessitate restrictions on those uses as determined by an airport land use commission. A statement in a declaration acknowledging that a property in an airport influence area does not constitute a title defect, lien, or encumbrance.

Airport Noise Disclosure

The Transferor(s) of residential real property who has (have) actual knowledge that the property in transaction is affected by airport noise must give written notice of that knowledge, as soon as practicable, before transfer of title (California Civil Code, Section 1102.17).

Not all airports have produced noise exposure maps. See the Airport Landing Facilities Disclosure for additional information. A property may be near or at some distance from an airport and not be within a delineated noise exposure area, but still experience aviation noise. Unless 65 db CNEL contour maps are published, helipads and military sites are not included in this section of the report.

Note: The Airport Noise Compatibility Planning Program is voluntary. Not all airports have elected to participate. Not all property in the vicinity of the airport is exposed to 65 db CNEL or greater average aviation noise levels. A property may be at some distance from an airport and still experience aviation noise. Zone Disclosures, Inc. obtains updated maps once a year. Purchasers should be aware that aviation noise levels can vary seasonally or change if airport usage changes after a map is published or after Zone Disclosures, Inc. receives the updated maps within the schedule set by Zone Disclosures, Inc. Zone Disclosures, Inc. uses the most seasonally conservative noise exposure provided.

Federal funding may be available to help airports implement noise reduction programs. Such programs vary and might include purchasing properties, re-zoning, and insulating homes for sound within 65 db areas delineated on CNEL maps. Airports owners have also cooperated by imposing use restrictions that include curfews, modifying flight paths and aircraft limitations.

DATABASE ADDENDUM (Megan’s Law)

California Civil Code Section 2079.10a (commonly referred to as “Megan’s Law”) requires the following notice be provided as part of the purchasers agreement to a buyer or lessee of residential property:

The California Department of Justice, sheriff’s departments, police departments serving jurisdictions of 200,000 or more and many other local law enforcement authorities maintain for public access a data base of locations of persons required to register pursuant to paragraph (1) of subdivision (a) of Section 290.4 of the Penal Code. The database is updated on a quarterly basis and a source of information about the presence of these individuals in any neighborhood.

A new California law, Assembly Bill 488 (Nicole, Parra) sponsored by the State Attorney General now provides the public with Internet access to detailed information on registered sex offenders.

This expanded access allows the public for the first time to use their personal computers to view information on sex offenders required to register with local law enforcement under California's Megan's Law. Previously, the information was available only by personally visiting police stations and sheriff offices or by calling a 900 toll-number. The new law was given final passage by the Legislature on August 24, 2004 and signed by the Governor on September 24, 2004.

Prospective purchasers are encouraged to investigate the State’s web site at: http://www.meganslaw.ca.gov.

Toxic Mold Addendum (“Toxic Mold Protection Act of 2001”)

California law (California Civil Code Section 1102.6 Et Seq) requires any seller, transferor, or lessor of residential, commercial. Or industrial property; or public entity that owns, leases, or operates a building provide a written disclosure to prospective purchasers, prospective tenants, renters, or occupants if the seller, transferor, lessor, or public entity has knowledge of mold conditions or in specified instances has reasonable cause to believe, that mold (visible or hidden) that exceeds permissible exposure limits is present that affects the unit, or building.

The State Department of Health Services is designated as the lead agency for identifying, adopting, and determining permissible exposure limits to mold in indoor environments, mold identification and remediation efforts.

Local Geologic Hazards Addendum

The City and/or the County where the subject property is situated may have relevant information on liquefaction and landslides in their General Plan. There may also be geologic, geotechnical, or grading reports that apply to the subject property. We suggest the Buyer thoroughly research the property with the City and or the County as part of his or her due diligence. Local geologic hazards, liquefaction, landslides, fault zones, geologic concerns, and permitting issues may be discovered that have not been disclosed due to the limited nature of the Natural Hazard Disclosure Statement.

Local Very High Fire Hazard Severity Zone Addendum

The California Department of Forestry and Fire Protection (CDF) under the Bates Bill (AB 337) established VHFHSZ in the Local Responsibility Areas (LRA) of California. The maps prepared by the CDF shows zones based on State criteria. Local agencies, by law, are allowed to make changes to the zones. The City and/or the County where the subject property is situated may have relevant information on “VHFHSZ’s in their General Plan. There may also be VHFHSZ data different then that provided by the State for the subject property. We suggest the Buyer thoroughly research the property with the City and County as part of his or her due diligence. Local fire hazards concerns may be discovered that have not been disclosed due to the limited nature of the Natural Hazard Disclosure Statement.

Mello-Roos Determinations

Mello-Roos Community Facilities Districts ("CFD") provide a method of financing certain public capital facilities and services especially in developing areas and areas undergoing rehabilitation. Public improvements funded by Mello-Roos CFDs may include, but are not limited to, roads, schools, water, sewer and storm drain facilities. Public services funded by Mello-Roos CFDs may include, but are not limited to, police and fire protection services, recreation program services, and flood or storm protection services. Mello-Roos CFDs commonly fund the construction of public improvements through the issuance of bonds. A special tax lien is placed on property within the district for the annual payment of principal and interest as well as administrative expenses. Typically, the annual special tax continues until the bonds are repaid, or until special taxes are no longer needed. Mello-Roos special tax rates may increase each year. In most instances but not all, the special tax is collected with regular property taxes.

Properties located within a Mello-Roos Community Facilities District are subject to a special tax, which is in addition to the regular property taxes and any other charges and benefit assessments that will be listed on the property tax bill. This special tax may not be imposed on all parcels within the city or county where the property is located. The special tax is used to provide public facilities or services that are likely to particularly benefit the property.

Special Assessments (1915 Bond Act)

1915 Bond Act assessment districts provide a method of financing certain public capital facilities. Public improvements funded by 1915 Bond Act districts may include, but are not limited to, roads, sewer, water and storm drain systems, and street lighting. 1915 Bond Act assessment districts commonly fund the construction of public improvements through the issuance of bonds. A special assessment lien is placed on property within the assessment district. The lien amount is calculated according to the specific benefit that individual property receives from the improvements and is amortized over a period of years. 1915 Bond Act assessments can be prepaid at any time. In most instances but not all, the assessment is collected with regular property taxes.

Properties within a 1915 Bond Act assessment district are subject to annual assessment installments (a Mello-Roos Community Facilities District special tax and the 1915 Bond Act Assessment District annual assessment installments are hereinafter collectively referred to as "Special Liens"), which are in addition to the regular property taxes and any other charges and benefit assessments that will be listed on the property tax bill. The assessment district issues bonds to finance the acquisition or construction of certain public improvements that are of direct and special benefit to property within the assessment district. The bonds will be repaid from annual assessment installments on property within the assessment district. The special assessment is used to provide public facilities that are likely to particularly benefit the property.