SUBDIVISION DISCLOSURE REPORT (PUBLIC REPORT) FOR Mesquite Hills, Phase I

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1 Arizona Department of Real Estate (ADRE) Development Services Division N. 44 th STREET STE-100 PHOENIX, AZ DOUGLAS A. DUCEY GOVERNOR JUDY LOWE COMMISSIONER SUBDIVISION DISCLOSURE REPORT (PUBLIC REPORT) FOR Mesquite Hills, Phase I aka Mesquite Hills Registration No. DM SUBDIVIDER Mesquite Hills Investments, LLC An Arizona limited Liability Company P.O. Box 2470 Cottonwood, AZ Effective Date May 31, 2013 First Amended Date: September 25, 2014 Second Amendment Date: October 26, 2015 PROPERTY REPORT DISCLAIMER This report is NOT A RECOMMENDATION NOR AN ENDORSEMENT by the State of Arizona of this land. The application and public report have not been subjected to a detailed examination by the Department. The report was prepared by the subdivider and none of the information in this report has been verified by the Department; all information has been accepted by the Department as true and accurate based on attestation of the subdivider/or the subdivider s agents. The purchaser should verify all facts before signing any documents. The Department assumes no responsibility for the quality or quantity of any improvement in this development. PHOENIX OFFICE: 2910 N. 44 th Street Suite 100 Phoenix, Arizona FORM Z3 Expedited Template rev 3/18/2015 1

2 Contents GENERAL... 4 SUBDIVISION LOCATION... 4 UTILITIES COMMON, COMMUNITY AND RECREATIONAL FACILITIES... 5 ASSURANCES FOR COMPLETION OF IMPROVMENTS... 5 STREETS, ROADS AND DRAINAGE... 6 LOCAL SERVICES AND FACILITIES PROPERTY OWNERS ASSOCIATIONS SUBDIVISION CHARACTERISTICS SUBDIVISION USE AND RESTRICTIONS AIRPORTS...11 TITLE METHOD OF SALE OR LEASE...12 TAXES AND ASSESSMENTS...12 FORM Z3 - Expedited Template 3/18/2015 2

3 THE ARIZONA DEPARTMENT OF REAL ESTATE 1. You BE GIVEN this public report; REQUIRES THAT: 2. YOU SIGN A RECEIPT indicating that you received this report; RECOMMENDS: 1. You DO NOT SIGN ANY AGREEMENT before you have read this report; 2. You see the EXACT PROPERTY you are interested in BEFORE SIGNING any document for lease or purchase. ARIZONA LAW STATES: 1. THE SALE OR LEASE OF SUBDIVIDED LANDS PRIOR TO ISSUANCE OF THIS REPORT OR FAILURE TO DELIVER THIS REPORT TO YOU SHALL RENDER THE SALE OR LEASE RESCINDABLE BY YOU. ACTION TO RESCIND MUST BE BROUGHT WITHIN 3 YEARS FROM DATE OF EXECUTION OF PURCHASE AGREEMENT. 2. CONTRACTS OR AGREEMENTS FOR THE PURCHASE OF AN UNIMPROVED LOT (WITHOUT A BUILDING)* MAY BE RESCINDED BY YOU WITHOUT CAUSE BY SENDING OR DELIVERING WRITTEN NOTICE OF RESCISSION BY MIDNIGHT OF THE SEVENTH CALENDAR DAY FOLLOWING THE SIGNING. 3. IF YOU HAVE SIGNED A PURCHASE AGREEMENT FOR THE PURCHASE OF AN UNIMPROVED LOT (WITHOUT A BUILDING)* PRIOR TO INSPECTING THE LOT, YOU HAVE SIX MONTHS TO INSPECT AND UPON INSPECTION MAY RESCIND THE PURCHASE AGREEMENT. *A contract or agreement for purchase of a lot which includes a building or obligates the seller to complete construction of a building within two years from the contract date does not constitute the purchase of an unimproved lot. Therefore, if your purchase includes a lot and a building or a building to be built, you are not entitled to the rescission rights described in paragraphs 2 and 3. FORM Z3 Expedited Template rev 3/18/2015 3

4 GENERAL This report includes: Lots 1, 6 thru 8, 12, 14, 15, 17 thru 20, 23 thru 27, 30 thru 40, 42, 43, 45, 46, 48, 49, and lots 52 thru 59 and lot 62 and lots 63 thru 117 The map of this subdivision is recorded in Book 63 of Maps, page 31, records of Yavapai County, Arizona. The subdivision is approximately acres in size. It has been divided into 147 Lots and Tracts A through ), inclusive. Lot boundaries will be staked with rebar at lot corners and radii. YOU ARE ADVISED TO OBTAIN A COPY OF THE RECORDED MAP AND CORRECTION DOCUMENTS, IF ANY, AND NOTE ALL EASEMENTS, RESTRICTIONS AND STATEMENTS CONTAINED THEREIN. SUBDIVISION LOCATION Location: Arizona W. Mingus Ave & Mesquite Hills Drive, Cottonwood, Yavapai County, State of UTILITIES Electricity: Arizona Public Service (APS), Facility completed to the lot line by prior developer Read Homes Mesquite Hills L.L.C. Purchasers will be required to pay $25.00 plus tax, service establishment fee and security deposit may be required. Telephone: CenturyLink , Facility completed to the lot line by prior developer Read Homes Mesquite Hills L.L.C. Purchasers will be required to pay $27.50, plus tax, connection fee and a basic monthly fee of approximately $ $ Extra options are available at additional costs. Cable: DirecTV Facility completed to the lot line by prior developer Read Homes Mesquite Hills L.L.C. Purchasers are advised to visit website as fees vary based on customer needs and may require additional fees such as a connection fee, service establishment fee, and a deposit. Internet or Fiber Optic: CenturyLink , Facility completed to the lot line by prior developer Read Homes Mesquite Hills L.L.C. Purchasers will be required to pay $19.95, plus tax, activation fee, plus $14.00, plus shipping and handling for modem, plus deposit may be required. FORM Z3 - Expedited Template 3/18/2015 4

5 Natural Gas: Unisource Energy, , Facility completed to the lot line by prior developer Read Homes Mesquite Hills L.L.C. Purchasers will be required to pay $20.00, plus tax, service establishment fee and a deposit may be required. Water: City of Cottonwood, Facility completed to the lot line by prior developer Read Homes Mesquite Hills L.L.C. Purchasers will be required to pay a $48.31 service establishment fee and a $ refundable deposit. Sewage Disposal: City of Cottonwood, Facility completed to the lot line by prior developer Read Homes Mesquite Hills L.L.C Purchasers cost will be a monthly charge of approximately $ Garbage Services: Taylor Waste with an approximate monthly fee of $16.00 plus fuel surcharge, to purchasers for service. (Subdivider/Master Developer) will or has completed the extension of the utilities to the lot line by ALL COMPLETED. PURCHASERS ARE ADVISED TO CONTACT THE ABOVE LISTED PROVIDERS REGARDING EXTENSION RULES, REGULATIONS, SERVICE CONNECTIONS, INSTALLATION CHARGES, ACCOUNT SET-UP FEES AND THE COSTS INVOLVED. COSTS ARE SUBJECT TO CHANGE BY THE SERVICE PROVIDERS. COMMON, COMMUNITY AND RECREATIONAL FACILITIES Within the Subdivision: Prior developer Read Homes Mesquite Hills L.L.C. has completed landscaping which is being maintained by the Homeowners Association. Purchaser s cost for continued maintenance is included in Homeowners Association assessments. Within the Master Planned Community: This subdivision is not part of a master planned community. ASSURANCES FOR COMPLETION OF IMPROVEMENTS Assurances for Completion of Subdivision Facilities: All facilities are complete. Assurances for Maintenance of Subdivision Facilities: Utility companies to maintain their respective facilities and the Association to maintain the common area amenities as stated in the recorded Declaration of Restrictions, Homeowners Association Articles of Incorporation and Bylaws. FORM Z3 - Expedited Template 3/18/2015 5

6 STREETS, ROADS AND DRAINAGE Access to the Subdivision: Prior developer Read Homes Mesquite Hills L.L.C. has completed asphalt paved public streets that has been accepted by the City of Cottonwood for maintenance. Purchaser s cost for continued maintenance is included in their property taxes. Access within the Subdivision: Prior developer Read Homes Mesquite Hills L.L.C. has completed asphalt paved public streets that have been accepted by the City of Cottonwood for maintenance. Purchaser s cost for continued maintenance is included in their property taxes. Street Lights: Prior developer Read Homes Mesquite Hills L.L.C has completed facility that has been accepted by the City of Cottonwood for maintenance. Purchaser s cost for continued maintenance is included in their property taxes. Flood and Drainage: Prior developer Read Homes Mesquite Hills L.L.C. has completed drainage facility. Continued maintenance will be the responsibility of Homeowners Association. Purchaser s cost for continued maintenance is included in Homeowners Association dues. Arizona State Trust Land: The Arizona State Land Department administers over 9.3 million acres of State Trust Land. This is not public land. Trust land may be subject to future development and may not be preserved or saved for open space without compensation. A person must have prior approval to use State Trust Land. Temporary recreational use is allowed with certain restrictions and conditions through purchase of a recreational permit. Use of State Trust Land without proper approval is a trespass. MANY ROADS ON RURAL TRUST LANDS ARE NOT LEGAL TRAVEL ROUTES, EXCEPT FOR STATE LESSEES AND HUNTERS, AND DO NOT PROVIDE LEGAL ACCESS TO PRIVATE LAND. STATE TRUST LAND MAY BE SOLD OR LEASED FOR USES WHICH MAY EXCLUDE RECREATION. RECREATION IS A TEMPORARY USE THAT MAY BE TERMINATED AT ANY TIME. For additional information, visit the State Land Department web page at or call (602) FORM Z3 - Expedited Template 3/18/ LOCAL SERVICES AND FACILITIES Schools: Cottonwood Elementary School, (Grade K-5) 301 N. Willard St. Cottonwood, approximately 2 miles northeast; Cottonwood Middle School, 500 E. Mingus Ave, Cottonwood, (Grades 6-8), is approximately 2 miles northeast; Mingus Union High School, (Grades 9-12), 1801 E. Fir St. Cottonwood, is approximately 4 miles southeast. SCHOOL BUS TRANSPORTATION WILL ONLY BE PROVIDED TO STUDENTS RESIDING OUTSIDE THE SCHOOLS DESIGNATED WALKING DISTANCE. PURCHASERS SHOULD CONTACT THE SCHOOLS TO DETERMINE THE AVAILABILITY OF SCHOOL BUS TRANSPORTATION. PURCHASERS ARE

7 ADVISED THAT SCHOOL BOUNDARIES AND SCHOOL BUS TRANSPORTATION MAY CHANGE. YOU SHOULD CONTACT THE COTTONWOOD OAK CREEK SCHOOL DISTRICT AT (928) OR AT OR MINGUS UNION HIGH SCHOOL AT (928) REGARDING THE CURRENT LOCAATION OF SCHOOLS AND BUS SERVICE. Shopping Facilities: Food City, 1501 E. Highway 89A, approximately 2.39 miles east; Safeway, 1635 E. Cottonwood St. Approx 2.48 miles east; Fry s Food Store, 1100 S. Highway 260 #A, approx. 3 miles east. Public Transportation: Cottonwood Area Transportation System (CATS) has roughly 42 stops located throughout the Cottonwood, Clarkdale, Bridgeport, and the Verde Villages area. For more information and stops contact or at and Verde Lynx provides service between Cottonwood and Sedona contact or at Medical Facilities: Verde Valley Medical Center located at 269 South Candy Lane, Cottonwood, AZ contact (928) Fire Protection: Cottonwood Fire Department located at 199 S. 6 th Street Cottonwood, AZ (928) Costs to purchasers for service included in the property taxes. Ambulance Service: Developer advises this subdivision is within a 911 service area. Ambulance Service to Verde Valley Medical Center is available by dialing Police Services: Cottonwood Police Department located at 199 S. 6 th Street, Cottonwood, AZ (928) Costs to purchasers for service included in the property taxes. ASSOCIATIONS Name and Assessments: Mesquite Hills Homeowners Association, Incorporated. Lot owners will be required to pay assessments in the amount of $45.00 per month. Control of Association: The Founder control Period begins on the date of the Association s incorporation and terminates upon the first of the following to occur: a) When 95% of the total number of Units (as defined in Section 3.1) permitted by applicable zoning for the property described in the Master Plan have certificates of occupancy issued thereon and have been conveyed to Persons other than builders holding title for purposes of construction and resale: b) December 31, 2030 c) When, in its discretion, the Founder so determines and declares in a recorded instrument. The founder has certain approval rights for a limited period as provided in the by-laws after the termination of the Founder Control Period. The Founder may assign its status and rights as the Foun der under the Governing Documents to any Founder Affiliate or any Person who takes title to any portion of the property described in FORM Z3 - Expedited Template 3/18/2015 7

8 Exhibit A or B (Community Charter) for the purpose of development and/or sale. Such assignment shall be made only in a recorded instrument signed by both parties. Title to Common Areas: Title to the common area tracts will be conveyed to the Homeowners Association upon completion and final inspection. Membership: All lot owners will be members of the Homeowners Association. PAYMENTS TO PROPERTY OWNERS ASSOCIATIONS ARE SUBJECT TO CHANGE IN ACCORDANCE WITH RECORDED RESTRICTIONS. SAID ASSOCIATION MAY ALSO IMPOSE SPECIAL ASSESSMENTS. YOU ARE ADVISED TO READ THE RECORDED DECLARATION OF (COVENANTS, CONDITIONS AND RESTRICTIONS, ARTICLES OF INCORPORATION, DECLARATION OF CONDOMINIUM, BYLAWS) FOR THIS SUBDIVISION TO DETERMINE THE RIGHTS OF LOT/UNIT OWNERS TO PARTICIPATE IN THE CONTROL OF THE PROPERTY OWNERS ASSOCIATION AND TO DETERMINE THE RIGHTS, DUTIES AND LIMITATIONS OF OWNERS IN AND TO USE OF THEIR LOT/UNITS. FURTHER, YOU SHOULD DETERMINE FOR YOURSELF IF SUBDIVIDER S ARRANGEMENTS AND PLANS FOR THE PAYMENT OF ASSESSMENTS ON UNSOLD LOTS/UNITS WILL BE SUFFICIENT TO FULFILL THE NEEDS, DEMANDS AND FINANCIAL OBLIGATIONS OF THE ASSOCIATION, AS SET FORTH IN THE DECLARATION AND BYLAWS. PAYMENTS TO PROPERTY OWNERS ASSOCIATIONS ARE SUBJECT TO CHANGE IN ACCORDANCE WITH RECORDED RESTRICTIONS. SAID ASSOCIATION MAY ALSO IMPOSE SPECIAL ASSESSMENTS Topography: Hills and wash area. SUBDIVISION CHARACTERISTICS Flooding and Drainage: In a letter dated May 16, 2008 Thomas L. Pender, P.E. of Pender Engineering states in part the following: The above referenced subdivision, Phase 1, Lots 1-62 are located in portions of sections 4 and 5, T15 N, R3 E of the G & S.R. B& M in Yavapai County. The project site lies within Zone X on FIRM Community Panel No C1781F classified by the Federal Emergency management Agency s National Flood Insurance Program. The Zone X classification indicates that the area is determined to be outside the mapped 500 year floodplain. Prospective buyers should not need to purchase flood insurance. The Flood Insurance Rate Maps (FIRM) does not denote any other classification which would be of lower flood probability. The FIRM that includes the project site is Community Panel No C1781F, which was revised June 6, In addition to the above referenced study the developer has identified areas designated as drainage corridors and natural open space. These areas are adjacent to many of the lots within the subdivision and they are subject to storm water flooding. Caution should be used when developing adjacent to open space shown on the recorded plat. Prospective buyers and homebuilders are advised to acquire drainage information specific to their lot prior to the purchase of any lot or the design and construction of any residence. Information may be obtained from the City of Cottonwood on any of the lots within the subdivision. FORM Z3 - Expedited Template 3/18/2015 8

9 Soils: In a letter dated May 7, 2008 Craig Wideman, P.E. of Western Technologies Inc. states in part the following: In accordance with your request, we are providing the following general discussion regarding geotechnical conditions on the above referenced site. Eight borings and thirty-two test pits were drilled and excavated on the site to depths of about 5 to 20 feet below existing site grades. Surface and subsoils encountered on the site consisted primarily of medium dense to dense clayey sands with medium plasticity fines; and firm to stiff medium plasticity sandy clays. Moderately weathered limestone was encountered in eleven of the test pits at depths of 5 to 9 feet below existing site grades. Refusal to backhoe excavation occurred in these pits on the limestone at depths of 5.5 to 9.5 feet below existing site grades. Refusal to backhoe excavation occurred in Pits 28 to 31 on densely nested boulders at depths of 5 to 8 feet below existing grades. Groundwater was not encountered in any boring or test pit at time of exploration. Selected soil samples obtained during the field exploration were tested for water content, density, gradation, plasticity, consolidation, expansion, water-soluble salts and sulfates, and R-value. Laboratory tests results indicate that native subsoils near anticipated shallow foundation levels exhibit relatively low to relatively high compressibility at existing water contents. Either low additional compression or low to moderate expansion occurs when the water content is increased. When water is added to compacted near-surface soils, low to relatively high expansion occurs. The primary geotechnical concern on this site is the tendency of the site soils to either compress or swell moderately to significantly when wet. Typical moisture sources that initiate this type of movement are rainfall, snow melt and landscape watering. This movement results in drywall cracking, warped windows and doors, and eventually structural distress. Water leaks from utilities can cause extreme damage in these types of soils. Conventional shallow spread footings and slabs-on-grade bearing on the site soils are not suitable for use on this project due to the volume change characteristics of these soils. To help minimize this problem, consideration should be given to the use of post-tensioned slab onground foundations. Post-tensioned slabs are thickened, reinforced concrete slabs-on-grade that contain tensioned steel cables to strengthen the slab. A post-tensioned slab combines the footings and floor slab into one rigid unit that acts like a raft and distributes stresses more uniformly throughout the structure if movement does occur due to volume change of the site soils. This will reduce the potential for cracking and warping of windows and doors. Although this type of foundation system is typically more expensive than conventionally shallow foundations, the cost is greatly offset by the reduced site preparation procedures that are required. Other possible foundation and site preparation treatments for this type of condition include removal of some or all of the clay soils and replacement with imported low expansive engineered fill material, or more specialized foundation system such as drilled shafts with voided grade beams and suspended floor systems. A comprehensive geotechnical evaluation would be required to provide more detailed design information. One of the major factors in reducing movements due to compressible and/or expansive soils is the proper control of surface water through positive drainage away from all structures. The quicker the water runs away from a structure, the less time it has to infiltrate into the soils. Proper backfill compaction around structures and in utility line trenches is also a key in minimizing subsurface moisture infiltration. This summary should not be used for design. FORM Z3 - Expedited Template 3/18/2015 9

10 Adjacent Lands and Vicinity: North: Highland Village Apartments, approx. 1.5 miles north; Centerville Park approx. 1.5 miles north; Pecks Lake, approx miles north; Access to Highway 89A approximately ¾ mile northeast; Vineyard Christian Fellowship, approx. 1 mile northeast; Spirit of Joy Lutheran church, approx miles northeast, Calvary Chapel Verde Valley, approx miles northeast; Pine Shadows Golf Course, approx. 1 mile northeast; Cottonwood Seventh-Day Advent, approx. 1.5 miles northeast; Verde Baptist Church approx. 1.5 miles Northeast; East: Blowout Creek runs adjacent to the east of the subdivision; Cottonwood Airport is east of the subdivision approx. ½ mile, (but not within the flight path), Copper Creek Apartments approx 1.7 miles east; Courtside Apartments approx miles east; Mingus Point Apartments, approx. 1/34 miles east; Verde Plaza Apartments, approx. 2 miles east; West: Jerome-Del Monte Shaft, Clarkdale, approx. 1.5 miles west. : THERE IS A 10 GAS LINE OWNED BY UNISOURCE ENERGY SERVICES THAT RUNS THROUGH MINGUS AVENUE LOCATED AT THE FAR EAST CORNER OF THE SUBDIVISION. THIS SUBDIVISION IS LOCATED WITHIN FIVE MILES OF AN AMERICAN INDIAN RESERVATION. ACTIVITIES ON THE RESERVATION INCLUDE OR MAY INCLUDE OPEN RANGE, AGRICULTURAL OPERATIONS AIRCRAFT OPERATIONS, INDUSTRIAL OPERATIONS AND DAIRY FARMS. A RESERVATION HAS ITS OWN LAWS GOVERNING THE LANDWITHIN ITS BOUNDARIES. THESE MAY INCLUDE TRESPASSING, DUMPING, ARCHAEOLOGY, HUNTING, FISHING, ETC. IN ADDITION CERTAIN AREAS OF THE RESERVATION MAY BE NONPUBLIC-CLOSED AREAS WHICH REQUIRE SPECIAL PERMISSION TO ENTER. THOROUGHFARES AND ROADS ON THE RESERVATION MAY NOT BE AVAILABLE FOR PUBLIC USE. YAVAPAI APACHE NATION, CLARKDALE, ARIZONA YAVAPAI APACHE TRIBAL CUMMUNITY BUILDING, High Voltage Lines: State if there are any existing or proposed high voltage power lines (115kv or greater) or any existing or proposed substations (115kV or greater) within the boundary of the subdivision or within ½ miles of the subdivision boundary. If so, then insert disclosure information as stated in the Public Report Worksheet, for transmission lines. NONE SUBDIVISION USE AND RESTRICTIONS Use: This offering is for improved lot Zoning: PAD Planned Area Development The definition of improved lot or parcel means a lot or parcel of a subdivision upon which lot or parcel there is a residential commercial or industrial building or concerning which a contract has been entered into between a subdivider and a purchaser that obligates the subdivider directly, or indirectly through a building contractor, to complete construction for residential, commercial or industrial building on the lot or parcel within two years from the date on which the contract of sale for the lot is entered into FORM Z3 - Expedited Template 3/18/

11 Conditions, Reservations and Restrictions: As stated in the recorded Declaration of Covenants, Conditions and Restrictions and as stated in the Articles of Incorporation and Bylaws of the Homeowners Association. Restrictions and Other Matters of Record: Conditions, reservations and restrictions that may run with the land including City or County zoning restrictions should be investigated by you. Copies of those items which are recorded may be inspected at the Office of the Yavapai County Recorder. Information about zoning may be obtained at the Office of the City of Cottonwood Planning and Zoning Department. Restrictions are recorded as cited in the following title exceptions and per the subdivision plat. Central Arizona Groundwater Replenishment District ( CAGRD ): The subdivision is enrolled as a Member Land of the Central Arizona Groundwater Replenishment District ( CAGRD ) pursuant to A.R.S and The CAGRD is managed and operated by the Central Arizona Water Conservation District ( CAWCD ), which manages and operates the Central Arizona Project. The CAGRD is obligated by statute to replenish the excess groundwater delivered to its members by the municipal water provider. CAGRD is required to levy an annual replenishment assessment against each parcel of Member Land to pay its replenishment costs and expenses, pursuant to A.R.S The replenishment assessment is not included in the tax estimates given above. A parcel s replenishment assessment is based on an assessment rate established annually by the CAWCD Board of Directors, multiplied by the actual volume of excess groundwater reported to be delivered to the parcel in the previous year. Therefore, a parcel s replenishment assessment will vary from year to year and will likely increase over time. The assessment is included in each parcel owner s annual property tax statement and is collected by the County Treasurers Office. For further information, you may contact CAGRD at (623) or visit their website at CAGRD FPN Number: NOTE: This development is not enrolled in the Central Arizona Groundwater Replenishment District. AIRPORTS Military Airport: State the name and location of the military airport in the vicinity as defined in A.R.S , if applicable. NONE Public Airport: State the name and location of the public airport in the vicinity as defined in A.R.S , if applicable. Cottonwood Airport 1001 W. Mingus Avenue, Cottonwood, is approximately 1 mile east of the subdivision TITLE Title to this subdivision is vested in VRE Cottonwood LLC, a Missouri limited liability company. Subdivider s interest in this subdivision is evidenced by recorded memorandum of Option. FORM Z3 - Expedited Template 3/18/

12 Title is subject, among other things, to all taxes, assessments, covenants, conditions, restrictions, limitations, reservations, rights, obligations, powers, easements, rights of way, liens, and charges of record. YOU SHOULD INVESTIGATE THE TITLE AND SATISFY YOURSELF AS TO WHAT EFFECT, IF ANY, THESE MATTERS MAY HAVE ON THE USE OF THE LAND. Title exceptions affecting the condition of title are listed in the Preliminary Title Report dated October 14 th, 2015 issued by Commonwealth Land Title Insurance Company, underwriter for Lawyers Title of Arizona. You should obtain a title report and determine the effect of the listed exceptions. EXCEPTIONS: SEE EXHIBIT A ATTACHED METHOD OF SALE OR LEASE Sales: Your vested interest/ownership interest in the property will be evidenced by the Subdivider delivering a recorded deed to you and you signing a promissory note and deed of trust for any unpaid balance. You should read these documents before signing them. Release of Liens and Encumbrances: As noted in Deed of Trust dated December 2011 and recorded December 30, 2011 at , paragraph No.3 which states in part: Trustor shall aggressively defend the mortgaged property against all claims and shall maintain and preserve the mortgaged property free and clear of liens, encumbrances and impairments of every kind except the permitted encumbrances and those herein granted to beneficiary. AS EACH LOT IS SOLD, IT WILL BE SOLD FREE AND CLEAR OF THIS AND ANY OTHER LIENS. ANY ENCUMBRANCES INCURRED BY THE PURCHASER FOR THE ACQUISITION OF THE LOT WILL BE THE RESPONSIBILITY OF THE PURCHASER. Use and Occupancy: Upon close of escrow and recordation of deed. Leasehold Offering: Will any of the property be leased? Yes X No THE PURCHASE CONTRACT IS A BINDING AGREEMENT. CONTRARY TO THE TERMS AND PROVISIONS OF THE CONTRACT, YOU MAY HAVE ADDITIONAL RIGHTS, REMEDIES AND WARRANTIES PROVIDED BY LAW. READ THOROUGHLY BEFORE SIGNING. IF NOT UNDERSTOOD, SEEK COMPETENT ADVICE PRIOR TO COMMITMENT TO PURCHASE. FORM Z3 - Expedited Template 3/18/ TAXES AND ASSESSMENTS Real Property Taxes: The combined primary and secondary property tax rate for this subdivision for the year 2015 is per $ assessed valuation. The estimated property tax for an improved lot (lot with dwelling), based on the above tax rate and average sales price of $195,000, is $ Special District Tax or Assessments: NONE AMOUNT OF TAXES AND ASSESSMENTS SET FORTH ABOVE ARE APPROXIMATE ONLY AND SUBJECT TO CHANGE.

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