LAW OFFICES OF ANN RANKIN

April 11, 2002

Members
Cabernet Vineyards HOA
c/o Ms. Cindy Smittle
MASSINGHAM & ASSOCIATES
2497 Industrial Park West
Hayward, CA 94545

Re: Disclosure Letter: Cabernet Vineyards HOA

Dear Members:

As you know, this office represented Cabernet Vineyards HOA in litigation against the developer of your complex over certain alleged design and construction deficiencies at the complex. The lawsuit was settled last year for $640,000. This letter is written as provided by California Civil Code 1375.1, to provide you with the Board's current intentions concerning the issues that were the subject of the lawsuit.

Alleged Structural Defects.

As a result of the structural investigations, the Association's engineers and the developer's engineer agreed that certain work needs to be done to strengthen the ability of the buildings to resist earthquake forces. There are no plans to require members to vacate their units when the work is done. Although the buildings do not meet minimum standards, the main concern is that there would be unnecessary damage in case of a major earthquake; no one has suggested that the buildings need to be evacuated, or that they are in eminent danger of collapse.

The Board currently plans to engage a contractor to perform the following structural repairs:

· Shear wall at entry;
· Shear wall at rear of the garage;
· Shear wall at fireplace;
· Shear wall at the attic party walls;

FIRE RESISTIVE CONSTRUCTION

Floor framing is exposed and unprotected at fire place chases adjacent to area separation walls. Required blocking and fire protection are absent between wall and door framing. The Board has planned to correct this condition.

Plumbing vents and other roof penetrations are too close to firewalls. The Board plans to correct this condition.

Sheetrock nail fasteners are too short at attic space firewalls. The attic separation walls are inadequately framed, nailed and taped and the Board expects to correct this condition.

Voids in the gypboard at area separation walls behind fireplaces and other cavities will be corrected.

Penetrations in the five foot closeout at the attic separation walls are expected to be corrected.

Inadequate fire stops in the attic separation walls are expected to be corrected.

The paper backing on the insulation is in contact with single wall flue pipes, and the Board expects to correct this condition.

Upper wall cavities lack proper fire stops. The Board expects to correct this condition.

Gas meter closets are not adequately vented, and the Board expects to correct this condition.

Fireplace flues are incomplete at the tops of the chimneys. The Board anticipates correcting this condition.

JNSJ Roofing has already completed the ridge vent installation on all the roofs.

All of the above items are considered high priority repairs. The Board has not yet received bids on the necessary work, but at the time this letter was written, the Board expected to perform all of these repairs. The Board could change its plans, and repair either more or fewer of the alleged conditions, depending upon how the bids come in.

The following conditions were identified in the Association's preliminary list of defects as being potential areas of concerns. There was no court judgment that these were defective conditions. The Board currently has no plans to address these conditions. It is possible that some or all of these conditions may be addressed in the future as funds become available, but there are no definite plans for them:

Gutter downspouts terminate into planters adjacent to buildings and collected roof rainwater is discharged at the building foundations. This water should be directed away from foundations to prevent unnecessary damage.

Site drainage is inadequate because there is an insufficient number of drain inlets and inadequate drainage and slope to drains.

Storm water is ponding on walkways and draining onto adjacent properties.

Atrium grates for small area drains are installed incorrectly.

Untreated fence posts are in contact with soil and are suffering from wood decay.

Garage concrete floor slabs are cracked in some locations.

Wood floors are uneven and squeak.

Nailing at wood blocks between floor joists is incomplete.

Some window flashing is damaged.

Some operable window sashes are difficult to operate.

Water intrusion is occurring at some windows and interior finishes are damaged.

Metal doors and hinges at exterior closets are corroded.

Exterior closet doors do not close properly.

Sheet metal flashing at roofs is top nailed; the nails are unsealed, and this installation does not provide proper weather protection.

Roof shingles are lifting at eaves at rake walls in some locations, and the roof edge is unflashed so that plywood sheathing and framing are exposed to weather at some locations.

Plumbing problems have been observed, include bathtubs that do not drain completely, leaking toilet valves, lav and sink valves that leak; water heater pressure relief valves that discharge onto garage floors.

Floor plywood sheathing is installed in such a way that it may compromise acoustical separation and rating.

If the Board's plans concerning these issues change materially in the future, we will send you an updated disclosure letter.

The Board expects to start these repairs in Summer, 2002, once the engineering plans and the contractors' bids are complete and the weather permits.

Very truly yours,

LAW OFFICES OF ANN RANKIN

Ann Rankin


AR:rkb