Knowing that the area was prone to earthquakes, all the buildings were reinforced with additional steel and concrete.
(A)
Knowing that the area was prone to earthquakes, -> Misplaced modifier -> We should get the answer Who was knowing? and the part right after the comma should have answered that but that's not the case -> Drop A
(B)
Having known that the area was prone to earthquakes, -> Even worse form of choice A -> Misplaced modifier for the above mentioned reason
(C) Since the area was known to be prone to earthquakes, -> Correct choice -> Passive form is used and this usage is correct as we are not aware about the doer of the action.
(D) Since
they knew that the area was prone to earthquakes, -> Who are "THEY"? We have no idea -> Drop D
(E) Being prone to earthquakes, -> Let's not dismiss this answer just by seeing the word "BEING" -> Usage of "BEING" as a modifier is wrong in GMAT. Also, in this case, it is certainly projecting the wrong meaning as well -> It says buildings were prone to earthquake but that wasn't the case to be true. It was the area that was prone to earthquake. Hence, drop E.
Correct choice is clearly C
Hope this helped you.