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HomeMy WebLinkAboutAMEND 2019-0006; THE SEAGLASS; Site Development Plan (SDP)• Indemnification and Insurance Requirement for Village Area Administrative Permit Certification Statement I Certify that I am the Legal Business Owner of the subject business and that all of the above information is true and correct to the best of my knowledge. I agree to accept and abide by any conditions placed on the subject project as a result of approval of this application. I agree to indemnify, hold harmless, and defend the City of Carlsbad and its officers and employees from all claims, damage or liability to persons or property arising from or caused directly or indirectly by the installation or placement of the subject property on the public sidewalk and/or the operation of the subject business on the public sidewalk pursuant to this permit unless the damage or liability was caused by the sole active negligence of the City of Carlsbad or its officers or employees. I have submitted a Certificate of Insurance to the City of Carlsbad in the amount of one million dollars issued by a company which has a rating in the latest "Best's Rating Guide" of "A-" or better and a financial size of $50-$100 (currently class Vil) or better which lists the City of Carlsbad as "additional insured" and provides primary coverage to the City. I also agree to notify the City of Carlsbad thirty days prior to any cancellation or expiration of the policy. The notice shall be delivered to: City Planner City of Carlsbad 1635 Faraday Avenue Carlsbad The insurance shall remain in effect for as long as the property is placed on the public sidewalk or the business is operated on the public sidewalk. This agreement is a condition of the issuance of this administrative permit for the subject of this permit on the public sidewalk. I understand that an approved administrative permit shall remain in effect for as long as outdoor displays are permitted within the Village Review Area and the permittee remains in compliance with the subject approved permit. Signature Date: 09/05/2019 Cerlification Statement: I Certify that I am the Legal Property Owner for the subject business location and that all of the above information is true and correct to the best of my knowledge. I support the applicant's request for a permit to place the subject property on the public sidewalk. 1 understand that an approved administrative permit shall remain in effect for as long as outdoor displays are permitted within the Village Review Area and the permittee remains in compliance with the subject approved permit. Signature Date: 09/05/2019 P-1 Page 3 of6 Revised 03117 Scenario's for Consideration (1 thru 4) Scenario 1 Restrict Unit H for Affordable Housing Compliance Summary The current design calls for eight (8) townhome units, each similar and stacked one against the other. All units are four (4) stories in layout. The end Unit H is the smallest of the eight (8) at 2,215sf. lt is a one car garage with a simple one (1) studio layout. If this unit is chosen to satisfy the restriction for an on- site Affordable Housing residence then the economic impact has been summarized. First, the original "Baseline" Project Proforma {Currently viewed as a 14% ROI) was shared with the Director Debbie Fountain and Associate Planner Shannon Harker (See Exhibit 2). It was then adjusted to current Market Sales Returns anticipated from the recent sale from the ''Railyard Lofts Project" at 2689 State St, Carlsbad {See Exhibit 1). Applying the marketing values from Exhibit 1 allows for projected sale on this project of$ 743/sf. Unit His 2,215sf of saleable living area. The apparent retail market value is calculated as $1,645,749. According to information from Director Debbie Fountain, a restricted Affordable Studio and/or One Bedroom can only, at today's policy approval, be sold for a maximum of$ 250,000 (See Exhibit 3). The differential between the two (Market vs Restricted) forms the Deficiency Loss to the Applicant. In this case, Deficiency Loss -Market Value -Restricted Affordable Rate= $1,645,749 -$250,000 = $ J,420,545 (Proforma ROI drops to 3%) Conclusion: A significant financial impact to the project. The Deficiency loss appears so high as to lose support from Housing and appears unreasonable to utilize the Housing Trust Fund in any significant manner. Therefore, All parties believe this is beyond support for City Council consideration for use of Trust Fund. Scenario 1 -Restrict Unit H "as is" Main Structure (Livable -Sell) PROFORMA l1a600 sf I Owner (Cost to Date) Land Acquisition Architect Design Eng. Fees CM Expense (entitlement) Permits/ Entitlement Fees / Special Inspection Direct Construction Cost Other M isc Developer Costs Affordable Housing Credit (Purchase) Legal (CC&R's, Condo mapping, etc) Marketing/ Sales / Commissions Wrap Insurance Coverage Owner Financing (Syndication/Investor) Contingency "(Constructoin / Sales/ Marketing Fluctuations (Lot Size ) I 18600 sf I Original PROJECTED SALE Break Even (Unit A -Unit H) 18600 sf Comparative Pricing 18600 sf Proiected Market Pricin2 18600 sf Comparative Pricin2 18600 sf 18600 sf PROJECT SUMMARY SeaGlass Developer's Proforma 2446 State St 9.16.19 REVISED Carlsbad Three Story 8 Unit Condominium over@ grade Garage 2 500 000 400 000 $ 90,000 $ 2,990,000 ALLOWANCE I $ 360,000 ! Entitlement $ 360,000 --$-340 ___ sf_! Schematic Budget $ 6,325,000 Construction _S"l'-_"""'6,..13!"'2"""'5~10!"!!0"""'0_.l ...... ___ $3_4_0_~ Main Building $ 9,675,000 (CREDIT) 5.00% 8.00% 9.00% $645 $700 $743 $790 Basis Comparative $ (84,000) $ 165,000 $ 483,750 $ 120,000 $ 774,000 $ 870,750 Development Budget I $ 12,004,soo I PROJECTED Gross Revenue from Sales Price Eauitv st 512,004,500 no gain st $13,020,000 $1,015,500 ST $13,819,800 $1815 300 ST $14,694,000 $2 689 500 $13,844,600 $1,840,100 $645 ROI 0 8% 15% 22% 15% Revised PROJECTED SALES (Scenario 1) PROJECTED Gross Revenue from Sales Unit H -Affordable Restricted (1 Bedrm) 2215 sf $113 sf $250,000 (*) Unit A thru Unit G -Balance 16385 sf $743 sf $12,174,055 18600 sf Basis Comparative $12,424,055 $419,555 3% I Deficiency Summary I -$1,420,545 I (~) Note: Affordable Housing Restricted Sales price (See Exhibit 3 • Affordable Cap per Housing Policy Team) Scenario 2 Re-Design and Reduce Unit H to 1100sf Summary The current design calls for eight (8) townhome units, each similar and stacked one against the other. All units are four (4) stories in layout. The end Unit His the smallest of the eight (8) at 2,215sf. It is a one (1) car garage with a simple one (1) studio layout. Unit H could be re-designed as a two {2) story studio. The first level would be the existing one (1) car garage but the 2nd level, accessed by internal stairway, would form the new smaller studio. This smaller Unit H configuration would be the restricted Affordable Housing Unit. The re-design reduces the size to llOOsf. The 3rd and 4th floors would be incorporated into the size of the adjacent Unit G (2333sf plus 2333sf = 3448sf}. Again, the original "Baseline" Project Proforma (See Exhibit Z) was projected as 14% ROI) was perceived for future sales at $750/sf. This Project Proforma was shared with the Director Debbie Fountain and Associate Planner Shannon Harker. The Proforma was then adjusted to current Market Sales Returns anticipated from the recent sale at the "Railyard Lofts Project'' at 2689 State St, Carlsbad {See Exhibit 1). Applying the marketing values from Exhibit 1 allows for projected sales on this project at$ 743/sf. The re-design reduces the size of Unit H from Z,215sf to 1,100sf of saleable living area. The apparent retail market value is therefore established as: l,lOOsf x $743/sf == $ 817,300 (Part A). However, there appears to be a secondary financial impact. The enlargement of Unit G from 2,333sf to 3,448sf shouldn't be ignored. It is believed that the increased size (50% larger than all of the other units) will result in a reduced pool of potential buyers. The size will also lead to a reduction in the units "Sales per SF Value). The larger Unit G will fall from $743/sf to possibly $675/sf. The apparent market value loss,therefore, from this secondarily impacted: 3,448s1 x ($743/sf-$675/sf = $68/sf drop in value)= $ 234,464 (Part B) The combined financial impact= Part A+ Part B = $817,300 + $234,464 = $1,051,764 According to information from Director Debbie Fountain, a restricted Affordable Studio and/or One Bedroom is unaffected by size. A Studio and/ or One Bedroom, therefore, still only be sold for a maximum of$ 250,000 {See Exhibit 3). The differential between the two (Market vs Restricted) then forms the Deficiency Loss to the Applicant. Deficiency Loss= Market Value -Restricted Affordable Rate == $ 1,051,764 -$ 250,000 == S 801,764 (Proforma ROI drops to 8%). Conclusion: While this improves the Deficiency Loss, an 8% ROI is considered far below what a reasonable developer and/or Investor would consider for any similar project. All parties believe this is beyond support for City Council consideration for use of Trust Fund deficiency compensation. All parties believe this is beyond support for City Council consideration for use of Trust Fund. ( Scenario 3 Re-Design Project for Six (6) Units Only Summary The current design calls for eight (8) townhome units, each similar and stacked one against the other. All units are four (4) stories in layout. If the entire project was re-designed into six (6) Townhome in lieu of eight (8) then the Affordable Housing Restriction becomes a mute point. The re-design increases the average size of each unit from 2,340sf to 3,lOOsf (18,600sf / 6 = 3.lOOsf average). Again, the original "Baseline" Project Proforma (Currently viewed as a 14% ROI} was based on future sales at $750/sf. This Project Proforma was shared with the Director Debbie Fountain and Associate Planner Shannon Harker (See Exhibit 2). The Proforma was then adjusted to current Market Sales Returns anticipated from the recent sale from the "Railyard lofts Project" at 2689 State St, Carlsbad {See Exhibit 1). Applying the marketing values from Exhibit 1 normally would allow for projected sales on this project at $ 743/sf, The re-design, however, increases the size of the townhomes substantially, (2,340 to 3,lOOsf) and will have an impact on the quantity of buyers and the "Sales per SF Value's they are willing to pay. This has been estimated at$ 690/sf in lieu of$ 743/sf {Exhibit 1). The revised Project Gross Revenue from Sales 18,600sf x ($690/sfvs $743/sf) = $12,834,000 (Part A} However, as Councilperson Cory Richardson pointed out, "time is money" and the loss of a year {$300,000 in financial consideration) along with the actual re-design and processing cost {$490,000) is significant. Cost Impact from Financial Time Loss+ Re-Design/Processing Cost= ($ 790,000) (Part B} The Combined Financial Impact= Part A+ Part B = $12,834,000 - $ 790,000 = $12,044,000 According to information from Associate Planner Shannon Harker, the requirement for an Affordable Housing Unit is then not required for a six (6) Townhome configuration. Deficiency Loss -o,;g;nal Proforma ROI (Exhibit 2) -Combined Financial Impact (Scenario 3) = $13,844,600 -12,044,000 = $1,800,600 (Proforma ROI drops to 0%). Conclusion: While this would be a valid approach, it simultaneously defeats the moral purpose for the Affordable Housing act itself. It simply bypasses the requirement. In so doing, however, the project becomes uneconomical for all purposes. All parties believe this is beyond support for City Council consideration for use of Trust Fund. Scenario 4 Purchase of an Affordable Housing Credit within Tavarua Apartments Summary The projects design has been analyzed in as many configurations as practical over the last several months. Unfortunately, a significant break thru to find a "reasonable" solution that the Housing Director could support and present to City Council was not found. As can be seen, simply incorporating an affordable unit into the current processed design did not result in any "Scenarion that seemed practical. None would be supported by Director Debbie Fountain for the utilization of the Housing Trust Fund in a responsible manner to mitigate significant financial deficiencies directly to the Applicant as the City Council had hoped. We believe that a reasonable and sincere effort has been put forth to find an on-site solution that could prove financially responsible and supportable. Again, we ask that: Pursuant to CMC Section 21.85.070, "When new construction is determined to be infeasible or present a hardsMp1 alternatives to the construction of a unit onsite include a contribution to a special needs housing project or program". On February 13, 2018, the city's Housing Policy Team recommended approval of the applicant's request {See Exhibit 4) to purchase one (1) affordable housing credit from the Tavarua senior affordable apartments located in the Northwest Quadrant of the city. We ask that this original requirement be approved and reinstated by the City Council and made a condition for the project's approval. Conclusion: Purchase one (1} credit for$ 84,000 to satisfy the Affordable Housing Criteria. All parties hope that efforts demonstrated can be supported by City Council reconsideration Exhibit's for Consideration (1 thru 4) Exhibit 1 Marketing Comparable Property 1. Railyard Lofts 2689 State St., Carlsbad MLS Listing: #180019677 Exhibit 2 Original Project Proforma 1. Proforma Adjusted dated 8.29.19 for Market Rates per Exhibit 1 Baseline Main Structure (Livable -Sell) PROFORMA Owner (Cost to Date) Land Acquisition Architect Design Eng. Fees CM Expense (entitlement) 118600 sf 1 Permits/ Entitlement Fees/ Special Inspection Direct Construction Other Developer Costs Affordable Housing Credit (Purchase) Legal (CC&R's, Condo mapping, etc) Marketing/ Sales / Commissions Wrap Insurance Coverage Financing (Syndication/Investor) Contingency (Construction/ Sales/ Marketing Fluctuations (Lot Size ll 18600 sf I PROJECTED SALE Break Even 18600 SF Comparative Pricing 18600 sf Comparative Pricing 18600 sf Comparative Pricin~ 18600 sf Sale/sf Unit PROJECT SUMMARY SeaGlass Exhibit 2 2446 State St 8.29.19 carlsbad Three Story 8 Unit Condominium over@ grade Garage $ 2,500,000 $ 400,000 $ 90,000 $ 2,990,000 ALLOWANCE I $ 360,000 I Entitlement $ 360,000 I $340 sf Schematic Budget $ 6,325,000 Main Building Construction $ 6,325,000 I $340 _s __ ...,.....,,,.,...,....,.,..... ____ __, 9,675,000 1 Is $ 84,000 $ 165,000 5.00% $ 483,750 $ 120,000 8.00% $ 774,000 9.00% $ 870,750 Development Budget I $ 12,112,soo 1 $654 I PROJECTED Equity Price Equity ROI $654 sf $12,172,500 no gain 0 $700 sf $13,020,000 $847,500 7% $743 sf $13,819,800 $1,647,300 14% $790 sf $14,694,000 $2.S2LSOO 21% Basis Comparative $13,844,600 $1,672,100 14% Exhibit 3 AFFORDABLE HOUSING Market Cap 1. Studio/ One (1) Bedroom $ 250,000 30 yr Restricted Cap 2. Two (2) Bedroom $ 350,000 30yr Restricted Cap Note: Quotes from August 25, 2019 meeting with Housing Director Debbie Fountain Low Income (80%) Sales Price & Mortgage Calculator (2017) Studio One Bdr Two Bdr Three Bdr Four Bdr Loan Amount $ (159,465) $ (190,380) $ (220,374) $ (284,918) $ (334,672) Annual Interest Rate 5.00% 5.00% 5.00% 5.00% 5.00% # of Payments (Months) 360 360 360 360 360 Monthly Mort. Payment I $856.04 I $1,022.00 I $1,183.02 I $1,529.50 I $1,796.59 Annual debt service $ (10,273) $ (12,264) $ (14,196) $ (18,354) $ (21,559) Gross Annual Income (80%AMI) $ 50,950 $ 58,200 $ 65,500 $ 78,600 $ 90,250 35% 35% 35% 35% 35% Mx. Affordable Housing Payment $ 1,486.04 $ 1,697.50 $ 1,910.42 $ 2,292.50 $ 2,632.29 Maximum Loan Pmt.(P&I) $ 856.04 1,022.00 $ 1,183.02 1,529.50 1,796.59 Qualified Loan Amount $ (159,465) $ (190,380) (220,374) (284,918) (334,672) Maximum Affordable Sales Price I $ 171,965 $ 205,380 $ 240,374 $ 309,918 $ 364,672 (loan amount + 5% of MV) Est. Market Value Sales Price $ 250,000 $ 300,000 $ 400,000 $ 500,000 $ 600,000 Buyer Downpayment (5% of MV) $ 12,500 $ 15,000 $ 20,000 $ 25,000 $ 30,000 Est. Affordable Sales Price $ 172,000 $ 205,500 $ 240,400 $ 310,000 $ 364,700 Total Housing Costs: Monthly loan payment (P & I) $ 856 $ 1,022 $ 1,183 $ 1,530 $ 1,797 taxes/mo. (1.2% of Aff Price) $ 172 $ 206 $ 240 $ 310 $ 365 PMI $ 40 $ 40 $ 46 $ -$ - HOA $ 350 $ 350 $ 350 $ 350 $ 350 Utility Allowance $ 68 $ 80 $ 91 $ 103 $ 121 Total Housing Costs $ 1,486 $ 1,698 $ 1,910 $ 2,293 $ 2,632 Assumed HH Size: 1 person 2 persons 3 persons 5 persons 7 persons Exhibit 4 Original Email from Housing (Director Fountain) 1. City of Carlsbad Housing Policy Team email, dated 2.13.18, in support of the findings for hardship and the recommendation for CREDIT purchase of a Tavarua Affordable Apartment unit for$ 84,000. From: Debbie Fountain (mailto:Oebbie.Fountain@carlsbadca.gov] Sent: Tuesday, February 13, 2018 3:20 PM Subject: RE: Carlsbad letter The City of Carlsbad's Housing Policy Team met this afternoon and agreed to support a recommendation to the Planning Commission and City Council to approve the purchase of one {1) affordable housing credit for your proposed project at 2646 State Street to satisfy the lnclusionary Housing requirements for the proposed project. This staff recommendation is based on your proposal to build 8 luxury condos on the property at 2646 State Street and under the condition that no standard modifications are required to approve the project. If there are any changes to your proposal, this recommendation may need to be reconsidered. If you pursue the project as presented, this staff recommendation will be presented to Planning Commission and City Council for their consideration for approval. Please note that the current credit price for the Tavarua Affordable Rental Development is $84,000, which is the only project available for you to purchase credits in the Northwest Quadrant. The credit is purchased at the time of building permit, and you will pay (if approved) the credit price noted in the development fee schedule at the time you pull building permits and pay the other development fees. This annual credit price Increases by CPI each year, so depending on the CPI this credit purchase price may increase by the time you purchase It. Thanks for your patience as we processed your request. If you have any questions, please let me know. Debbie Fountain Interim Community & Economic Development Director Housing & Neighborhood Services Director City of Carlsbad 1635 Faraday Avenue Carlsbad, Ca. 92016 11.901 434 .. 2783 (760) 434-2935 Debbie. fo unta i n@ca rls bad ca .gov RESOLUTION of 2646 Seaglass LLC RESOLVED, that the execution of Deeds, powers of attorney, transfers, assignment, contracts, obligations, certificates, and other instruments of whatever nature entered into by the Company directly or through a transfer agent or registrant for any stock company, acting in its capacity as a corporate director or exercising any and all other powers conferred upon it by the letters Patent incorporating it or by the law pertaining to such matters, shall be signed by the person listed below: LiheTao Member ··, ,.- Signature:_·_' ______ _ RESOLVED, that all acts taken above and resolutions are approved, ratified and adopted. "'"'. :___ "'· ;'> Tao Yu Member/Signer ' Signature: __ .,_.,_-~) ____ _ EXHIBITA ALPHROGEN DEVELOPMENT LLC 50% 7922 DAGGET ST SAN DIEGO CA 92111 Zheng Yuan 20% 7756 EL TORDO RANCHO SANTA FE, CA 92067 Ying Xu 10% 1-3-1 XISHANMEISHU HAIDIAN DISTRICT BEIJING, CHINA 10000 EASTWENLLC 6852 VIA DEL CHARRO RANCHO SANTA FE CA 92067 20% 2646 SEA GLASS, LLC Operating Agreement T G Cllll'AtiOTITLE G Fiddit~· National ·nt1e· ~FN BUILDER SERVICES (j, c- 2365 Northside Drive, Suite 600 San Diego, CA 92108 Phone: (619) 521-3500 Fax: (619) 521-3608 Issuing Policies of Chicago Title Insurance Company ORDER NO.: 00109837-996-SDI-RT4 Prophet Solutions, Inc. 5845 Avenida Encinas, Ste 138 Carlsbad, CA 92008 ATTN: Raquel Orozco Email: raquel@prophetsolutioninc.com REF: Escrow/Customer Phone: (619) 521-3500 Title Officer: Theresa Robertson Title Officer Phone: (619) 521-3552 Title Officer Fax: (619) 521-3608 Title Officer Email: theresa.robertson@ctt.com PROPERTY: 2646 STATE STREET, CARLSBAD, CA PRELIMINARY REPORT In response to the application for a policy of title insurance referenced herein, Chicago Title Company hereby reports that it is prepared to issue, or cause to be issued as of the date hereof, a policy or policies of title insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shawn or referred to as an exception herein or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations or Conditions of said policy forms. The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said policy or policies are set forth in Attachment One. The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrab/e matters shalJ be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. Limitations on Covered Risks applicable to the CLTA and ALTA Homeowner 's Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of liability for certain coverages are also set forth in Attachment One. Copies of the po/icy forms should be read. They are available from the office which issued this report. This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested The policy(s) of title Insurance to be issued hereunder will be policy(s) of Chicago Title Insurance Company, a Florida corporation. Please read the exceptions shown or referred to herein and the exceptions and exclusions set forth in Attachment One of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under tlie terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report ls not a written representation as to the condition of title and may not list all liens, defects and encumbrances affecting title to the land. Chicago Title Company • ,, /9owJ µp..:. t-. q-Rarid-f a .. r11 p,.,_1 "''" By: £__ Authorized Signature Mic:haol G<;r,-tat. SK,e1..-, CL TA Preliminary Report Form -Modified li 1/17/06) Pagel llRELIMINARY REPORT YOUR REFERENCE: EXHIBIT "A" LEGAL DESCRIPTION Chicago Title Company ORDER NO.: 00!09837-996-SDI-RT4 THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CARLSBAD, IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: THE SOUTHWESTERLY 175 FEET OF THE NORTHWESTERLY HALF OF LOT 25 OF SEASIDE LANDS IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1722 FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JULY 28, 1921. THE NORTHEASTERLY AND SOUTHEASTERLY LINES OF SAID PROPERTY BEING PARALLEL WITH THE SOUTHWESTERLY AND NORTHWESTERLY LINES RESPECTIVELY OF SAID LOT 25. APN(s): 203-lOl-20-00 CL TA Prelimi11ary Report Fonn -Modified (11/17/06) Page 3 l'RELIMINARY REPORT YOUR REFERENCE: EXCEPTIONS Chicago Title Company ORDER NO.: 00109837-996-SDI-RT4 AT THE DATE HEREOF, ITEMS TO BE CONSIDERED AND EXCEPTIONS TO COVERAGE IN ADDITION TO THE PRINTED EXCEPTIONS AND EXCLUSIONS IN SAID POLICY FORM WOULD BE AS FOLLOWS: A. Property taxes, which are a lien not yet due and payable, including any assessments collected with taxes to be levied for the fiscal year 2019-2020. B. Supplemental taxes, including any personal property taxes and any assessments collected with taxes, assessed pursuant to the provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and Taxation Code of the State of California, are as follows: Tax Identification No.: Fiscal Year: 1st Installment: Penalty: Delinquent: 2nd Installment: Penalty: Delinquent: Code Area: Supplemental Bill No.: 203-101-20-00 2018-2019 $4,464.36, DELINQUENT $446.43 4December 10, 2019 $4,464.36, DELINQUENT $456.43 April IO, 2020 09098 889-454-59-58 C. The lien of supplemental or escaped assessments of property taxes, if any, made pursuant to the provisions of Chapter 3.5 (commencing with Section 75) or Part 2, Chapter 3, Articles 3 and 4, respectively, of the Revenue and Taxation Code of the State of California as a result of the transfer of title to the vestee named in Schedule A or as a result of changes in ownership or new construction occurring prior to Date of Policy. I. Water rights, claims or title to water, whether or not disclosed by the public records. PLEASE REFER TO THE "INFORMATIONAL NOTES" AND "REQUIREMENTS" SECTIONS WHICH FOLLOW FOR INFORMATION NECESSARY TO COMPLETE THIS TRANSACTION. END OF EXCEPTIONS CL TA Preliminary Report Funn -Modified (11/17/06) Page4 PRELIMINARY REPORT '(OUR REFERENCE: REQUIREMENTS SECTION NONE END OF REQUIREMENTS CL TA Preliminary Report Fonn -Modified li 1/17/06) Chicago Title Company RDER NO.: 00!09837-996-SDI-RT4 Page 5 PRELIMINARY REPORT YOUR REFERENCE: Theresa Robertson/jh2 INFORMATIONAL NOTES SECTION NONE END OF INFORMATIONAL NOTES CL TA Preliminary Report Form -Modified ( 11/17/06) Chicago Title Company JRDER NO.: 00\09837-996-SDI-RT4 Page6 · ::~t,\J IRE SAF L. j Inquire before you wire! Wire Fraud Alert This Notice is not intended to provide legal or professional advice. If you have any questions, please consult with a lawyer. All parties to a real estate transaction are targets for wire fraud and many have Jost hundreds of thousands of dollars because they simply relied on the wire instructions received via email, without further verification. If funds are to be wired in conjunction with this real estate transaction, we strongly recommend verbal verification of wire instructions through a known, trusted phone number prior to sending funds. In addition, the following non-exclusive self-protection strategies are recommended to minimize exposure to possible wire fraud. • NEVER RELY on emails purporting to change wire instructions. Parties to a transaction rarely change wire instructions in the course of a transaction. • ALWAYS VERIFY wire instructions, specifically the ABA routing nwnber and account number, by calling the party who sent the instructions to you. DO NOT use the phone number provided in the email containing the instructions, use phone numbers you have called before or can otherwise verify. 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We advise you to read the privacy policy of every website you visit Use of Personal Information FNF uses Personal Information for three main purposes: • To provide products and services to you or in connection with a transaction involving you. • To improve our products and services. • To communicate with you about our, our affiliates', and third parties' products and services, jointly or independently. When Information ls Disclosed We may make disclosures of your Personal Information and BrO\vsing Information in the following circumstances: • to enable us to detect or prevent criminal activity, fraud, material misrepresentation, or nondisclosure; • to nonaffiliated service providers who provide or perform services or functions on our behalf and who agree to use the information only to provide such services or functions; • to nonaffiliated third party service providers with whom we perform joint marketing, pursuant to an agreement with them to jointly market financial products or services to you; • to law enforcement or authorities in connection with an investigation, or in response to a subpoena or court order; or FNF Privacy Statement (Eff. 5/1/2015) Last Updated March 1, 2017 MISC0219 (OSI Rev. 3/2/17) Copyright© 2017. Fidelity National Financial, Inc. All Rights Reserved Pagel Order No. 00I09837-996-SDI-RT4 •· in the good-faith belief that such disciusure is necessary to comply with legal process or appucable laws, or to protect the rights, property, or safety of FNF, its customers, or the public. The law does not require your prior authorization and does not allow you to restrict the disclosures described above. Additionally, we may disclose your information to third parties for whom you have given us authorization or consent to make such disclosure. We do not otherwise share your Persona! Information or Browsing Information with nonaffiliated third parties, except as required or permitted by !aw. We reserve the right to transfer your Personal Information, Browsing Information, and any other information, in connection with the sale or other disposition of al! or part of the FNF business and/or assets, or in the event of bankruptcy, reorganization, insolvency, receivership, or an assignment for the benefit of creditors. By submitting Personal Information and/or Browsing Information to FNF, )OU expressly agree and consent to the use and/or transfer of the foregoing information in connection with any of the above described proceedings. Please see "Choices With Your Information" to learn the disclosures you can restrict. Security of Your Information We maintain physical, electronic, and procedural safeguards to guard your Personal Infonnation. We limit access to nonpublic personal information about you to employees who need to know that information to do their job. When we provide Persona\ Information to others as discussed in this Privacy Notice, we expect that they process such information in compliance with our Privacy Notice and in compliance with applicable privacy laws. Choices With Your Information If you do not want FNF to share your information with our affiliates to directly market to you, you may send an "opt out" request by email, phone. ur physical mail as directed at the end of this Privacy Notice. We do not share your Personal Information with nonaffiliates for their use to direct market to you. Whether you submit Personal Information or Browsing Information to FNF is entirely up to you. If you decide not to submit Personal Information or Browsing Information, FNF may not be able to provide certain services or products to you. For California Residents: We will not share your Personal Information and Browsing Infonnation with nonaffiliated third parties, except as permitted by California law. For Nevada Residents: You may be placed on our internal Do Not Call List by calling (888) 934-3354 or by contacting us via the information set forth at the end of this Privacy Notice. Nevada law requires that we also provide you with the following contact information: Bureau of Consumer Protection, Office of the Nevada Attorney General, 555 E. Washington St., Suite 3900, Las Vegas, NV 89101; Phone number: (702) 486-3132; email: BCPINFO@ag.state.nv.us. For Oregon Residents: We will not share your Personal Information and Browsing Information with nonaffiliated third parties for marketing purposes, except after you have been informed by us of such sharing and had an opportunity to indicate that you do not want a disclosure made for marketing purposes. For Vermont Residents: We will not share information about your creditworthiness to our affiliates and will not disclose your personal information, financial information, credit report, or health information to nonaffiliated third parties to market to you, other than as permitted by Vermont law, unless you authorize us to make those disclosures. Information From Children The FNF Websites are meant for adults and are not intended or designed to attract persons under the age of eighteen (18).We do not collect Personal Information from any person that we know to be under the age of thirteen ( 13) without pennission from a parent or guardian. International Users FNF's headquarters is located within the United States. Ifyuu reside outside the United States and choose to provide Persona! lnfonnation or Browsing Information to us, please note that we may transfer that information outside of your country of residence for any of the purposes described in this Privacy Notice. By providing FNF with your Personal Information and/or Browsing Information, you consent to our collection, transfer, and use of such information in accordance with this Privacy Notice. FNF Website Services for Mortgage Loans Certain FNF companies provide services to mortgage loan servicers, including hosting websites that collect customer information on behalf of mortgage loan servicers (the "Service Websites"). The Service Websites may contain links to both this Privacy Notice and the mortgage loan servicer or lender's privacy notice. The sections of this Privacy Notice titled When Information is Disclosed, Choices with Your Information, and Accessing and Correcting Information do not apply to the Service Websites. The mortgage loan servicer or lender's privacy notice governs use, disclosure, and access to your Personal Information. FNF does not share Personal Information collected through the Service Websites, except (I) as required or authorized by contract with the mortgage loan servicer or lender, or (2) as required by law or in the good-faith belief that such disclosure is necessary to comply with a legal process or applicable law, to enforce this Privacy Notice, or to protect the rights, property, or safety ofFNF or the public. Your Consent To This Privacy Notice; Notice Changes By submitting Personal Information and/or Browsing Information to FNF. you consent to the collection and use of the information in accordance with this Privacy Notice. We may change this Privacy Notice at any time. The revised Privacy Notice, showing the new revision date, will be posted on the FNF Website. Each time you provide information to us following any amendment of this Privacy Notice, your provision of information to us will signify your assent to and acceptance of the terms of the revised Privacy Notice for all previously collected information and information FNF Privacy Statement (Eff. 5/1/2015) Last Updated March I, 2017 Copyright© 2017. Fidelity National Financial, Inc. All Rights Reserved MISC0219 (DSI Rev. 3/2/17) Page 2 Order No. 00I09837·996-SDl•RT4 ~ollected from you in the future. We may use cou1ments, infonnation or feedback that you submit to u~ ,11 any manner that we may choose without notice or compensation to you. Accessing and Correcting Information; Contact Us If you have questions, would like to access or correct your Personal lnfonnation, or want to opt-out of infonnation sharing for affiliate marketing, send your requests via email to privac)@fnf.com, by phone to (888) 934-3354, or by mail to: Fidelity National Financial, Inc. 60 I Riverside A venue Jacksonvil!e, Florida 32204 Attn: Chief Privacy Officer FNF Privacy Statement (E!T. 5/1/2015) Last Updated March I, 2017 M!SC0219 (OSI Rev. 3/2/17) Copyright© 2017. Fidelity National Financial, Inc. All Rights Reserved Page 3 Order No. 00109837-996-SDI-RT4 Notice of Available Discounts Pursuant to Section 2355.3 in Title 10 of the California Code of Regulations Fidelity National Financial, Inc. and its subsidiaries ("FNF") must deliver a notice of each discount available under our current rate filing along with the delivery of escrow instructions, a preliminary report or commitment. Please be aware that the provision of this notice does not constitute a waiver of the consumer's right to be charged the field rate. As such, your transaction may not qualify for the below discounts. You are encouraged to discuss the applicability of one or more of the below discounts with a Company representative. These discounts are generally described below; consult the rate manual for a full description of the terms, conditions and requirements for each discount. These discounts only apply to transaction involving services rendered by the FNF Family of Companies. This notice only applies to transactions involving property improved with a one-to-four family residential dwelling. FNF Underwritten Title Company CTC -Chicago Title Company Available Discounts FNF Underwriter CTIC -Chicago Title Insurance Company CREDIT FOR PRELIMINARY REPORTS AND/OR COMMITMENTS ON SUBSEQUENT POLICIES (CTIC) Where no major change in the title has occurred since the issuance of the original report or commitment, the order may be reopened within 12 months and all or a portion of the charge previously paid for the report or commitment may be credited on a subsequent policy charge within the following time period from the date of the report. DISASTER LOANS (CTIC) The charge for a lender's Policy (Standard or Extended coverage) covering the financing or refinancing by an owner of record, within 24 months of the date ofa declaration of a disaster area by the government of the United States or the State of California on any land located in said area, which was partially or totally destroyed in the disaster, will be 50% of the appropriate title insurance rate. CHURCHES OR CHARITABLE NON-PROFIT ORGANIZATIONS (CTIC) On properties used as a church or for charitable purposes within the scope of the nonnal activities of such entities, provided said charge is normally the church's obligation the charge for an owner's policy shall be 50% to 70% of the appropriate title insurance rate, depending on the type of coverage selected. The charge for a lender's policy shall be 40% to 50% of the appropriate title insurance rate, depending on the type of coverage selected. EMPLOYEE RATE (CTC and CTIC) No charge shall be made to employees (including employees on approved retirement) of the Company or its underwritten, subsidiary title companies for policies or escrow services in connection with financing, refinancing, sale or purchase of the employees' bona fide home property. Waiver of such charges is authorized only in connection with those costs which the employee would be obligated to pay, by established custom, as a party to the transaction. CA Discount Notice Effective Date: 1-10-2010 ATTACHMENT ONE CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY -1990 EXCLUSIONS FROM COVERAGE The fol!owing matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage or for the estate or interest insured by this policy. 4. Unenforceabi!ity of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien ofthe insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender, by reason of the operation offcderal bankruptcy, state insolvency or similar creditors' rights laws. EXCEPTIONS FROM COVERAGE -SCHEDULE B, PART I This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of: 1. Taxes or assessments which are not sho\.\TI as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records. 2. Any facts, rights. interests, or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession thereof. 3. Easements, liens or encumbrances, or claims thereof, not shown by the public records. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. 5. (a) Unpatentcd mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the public records. 6. Any lien or right to a lien for services, labor or material not shown by the public records. CL TA HOMEOWNER'S POLICY OF TITLE INSURANCE (12-02-13) ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE EXCLUSIONS In addition to the Exceptions in Schedule B, You are not insured against loss, costs, attorneys' fees, and expenses resulting from: 1. Governmental police power, and the existence or violation of those portions of any law or government regulation concerning: a. building: b. zoning; c. land use; d. improvements on the Land; e. land division; and f. environmental protection. This Exclusion does not limit the coverage described in Covered Risk 8.a., 14, 15, 16, 18, 19, 20, 23 or 27. 2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not limit the coverage described in Covered Risk 14 or 15. 3. The right to take the Land by condemning it. This Exclusion does not limit the coverage described in Covered Risk 17. 4. Risks: a. that are created, allowed, or agreed to by You, whether or not they are recorded in the Public Records; b. that are Known to You at the Policy Date, but not to Us, unless they are recorded in the Public Records at the Policy Date; Attachment One (6-5-14) CA & NV c~ that result in no loss to You; or d. that first occur after the Policy Date. this does not limit the coverage described in Covered Risk 7, 8.e., 25, 26, 27 or 28. 5. Failure to pay value for Your Title. 6. Lack of a right: a. to any land outside the area specifically described and referred to in paragraph 3 of Schedule A; and b. in streets, alleys, or watern,ays that touch the Land. This Exclusion does not limit the coverage described in Covered Risk 11 or 21. 7. The transfer of the Title to You is invalid as a preferential transfer or as a fraudulent transfer or conveyance Wlder federal bankruptcy, state insolvency, or similar creditors' rights laws. 8. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence. 9. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances. LIMITATIONS ON COVERED RISKS Your insurance for the following Covered Risks is limited on the Owner's Coverage Statement as follows: • For Covered Risk 16, 18, 19, and 21 Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A. The deductible amounts and maximum dollar limits shown on Schedule A are as follows: Covered Risk 16: Covered Risk 18: Covered Risk 19: Covered Risk 21: Your Deductible Amount 1.00% % of Policy Amount Shown in Schedule A or $2,500.00 (whichever is Jess) 1.00% % of Policy Amount Shown in Schedule A or $5,000.00 (whichever is less) 1.00% of Policy Amount Shown in Schedule A or $5,000.00 {whichever is less) 1.00% of Policy Amount Shown in Schedule A or $2,500.00 (whichever is less) 2006 AL TA LOAN POLICY (Q6.t7--06) EXCLUSIONS FROM COVERAGE Our Maximum Dollar Limit of Liability $10,000.00 $25,000.00 $25,000.00 $5,000.00 The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: L (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; {iii) the subdivision ofland: or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion l(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion l(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured Wlder this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13 or 14); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing·business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth•in-lending law. 6, Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien ofthe Insured Mortgage, is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk \3(b) of this policy. 7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the Insured Mortgage in the Public Records. This Exclusion does not modify or limit the coverage provided under Covered Risk l l(b). The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE (Except as provided in Schedule B. Part II,{ t(or T)his policy does not insure against loss or damage, and the Company wil! not pay costs, attorneys' fees or expenses, that arise by reason of: Attachment One (6-H4) CA & NV (PART I (The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: I. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affer.:ting the Title that would be disclosed by an accurate and complete land survey of the Land aod not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material not shown by the Public Records. PART II In addition to the matters set forth in Part I of this Schedule, the Title is subject to the following matters, and the Company insures against loss or damage sustained in the event that they are not subordinate to the lien of the Insured Mortgage:) 2006 ALTA OWNER'S POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: I. (a) Any law, ordinance, pennit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion l(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion l(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 9 and 10); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title. 4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction vesting the Title as shown in Schedule A, is (a) a fraudulent conveyance or fraudulent transfer; or (b) a preferential transfer for any reason not stated in Covered Risk 9 of this policy. 5. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A. The above policy fonn may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees or expenses, that arise by reason of: (The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: I. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown in the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and that are not shown by the Public Records. 5. (a) Unpatented mining claims: (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights. claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material not shown by the Public Records. 7. (Variable exceptions such as taxes, easements, CC&R's, etc. shown here.) Attachment One {6-5-14} CA & NV • .. ALTA EXPA~OED COVERAGE RESlDENTIAL LOAN POLK• (12-02-13) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: I. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting. or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion l(a) does not modify or limit the coverage provided under Covered Risk 5, 6, l3(c), l3(d), 14 or 16. (b) Any governmental police power. This Exclusion l(b) does not modify or limit the coverage provided under Covered Risk 5, 6, l3(c), 13(d), 14 or 16. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 16, 17, 18, 19,20,2!,22,23,24,270r28);or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing-business laws of the state where the Land is situated. 5. Invalidity or unenforceabi\ity in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury, or any consumer credit protection or truth-in-lending law. This Exclusion does not modify or limit the coverage provided in Covered Risk 26. 6. Any claim of invalidity, unenforceability or lack of priority of the lien of the [nsured Mortgage as to Advances or modifications made after the Insured has Knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy. This Exclusion docs not modify or limit the coverage provided in Covered Risk 11. 1. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching subsequent to Date of Policy. This Exclusion does not modify or limit the coverage provided in Covered Risk I l(b) or 25. 8. The failure of the residential structure, or any portion of it, to have been constructed before, on or after Date of Policy in accordance with applicable building codes. This Exclusion does not modify or limit the coverage provided in Covered Risk 5 or 6. 9. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien ofthe Insured Mortgage, is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk 27(b) of this policy. 10. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence. 11. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances. Attachment One {6-5-14) CA & NY