Edited to add a comment by reader Nick Lymberis –
“I’m sorry. I’ve missed the point of why you are asking the question(s) regarding whether using Old Maps to determine whether a home was in a fire hazard or not as being O.K.?
There is no issue. Any information provided is as of the date of the disclosure. Period. Saying you weren’t wrong because the old maps showed it to be so is begging the issue.
Fidelity has shown themselves not to be reliable and so should not be used. Period.
The broker is lucky that the Buyer’s hadn’t lifted their insurability contingency before finding out the house was in a fire hazard zone.”
Seems like everybody in San Diego County real estate circles is talking about what happened when an agent delivered an NHD report using maps that were not current.
A Prudential California Realty agent recently ordered an NHD report for a pending residential home sale. The problem is that the report used old data, which led the buyer to threaten a lawsuit based on severe emotional distress resulting in an undisclosed cash settlement. Oh, and the buyer backed out of the sale too.
So now tongues are wagging and fingers are pointing, but RE-Insider was able to get the inside information.
Read the story:
A Prudential California agent recently ordered a Disclosure Source NHD report, which is a Fidelity-owned company. As a side note, we wonder whether the report was ordered through Transaction Point, which is a product marketed by a Fidelity company. RE-Insider, in our article dated November 2, 2010, flagged the highly RESPA-questionable “Pay to Play” characteristics of Transaction Point as explained by Fidelity’s vice president.
The Disclosure Source NHD report listed the North County, San Marcos property as NOT in a Very High Fire Hazard Severity Zone. But this disclosure was based on OLD MAPS! The home insurance company said the property was indeed in the zone and would require $4,500 in additional premiums. Needless to say, the buyer panicked at this failure to disclose and BACKED OUT OF THE PURCHASE.
Prudential California did the right thing; they ordered a second report from another independent NHD provider, Property I.D. And guess what? Property I.D.’s report showed the property was indeed in a Very High Fire Hazard Severity Zone. The insurance company was right and so was Property I.D.
One San Diego Escrow officer, who was very aware of the story, told us how critical it is to get the most accurate and up-to-date information. According to this Escrow officer, it was well known in local circles that San Diego County maps had been updated and that a lot of properties in San Marcos now sit in Very High Fire Hazard Severity Zone maps.
The escrow officer also suggested that, all too often, agents do not review the documents they receive for accuracy – or even that they received what they ordered. They just check off that they got the report – whether it’s preliminary Title, seller disclosures, or NHD.
Mike Scott of Disclosure Source Inbound Sales admitted that Disclosure Source had listed the San Marco property incorrectly, and promised to send a copy of the report to RE-Insider along with their engineer’s comments.
But Disclosure Source Engineer Jeffery Asbury changed the story. He claimed, in writing to RE-Insider, that Disclosure Source correctly determined that the property was not in a Very High Fire Hazard Severity Zone based on maps from 2005.
So was the property in a Very High Fire Hazard Severity Zone or not? RE-Insider sent our own reporters directly to the San Marcos City planner and fire Marshall and asked where does the property lie? We thought we should independently verify what the City had to say. Guess what the planner and fire Marshall BOTH confirmed – the property indeed lies in a Very High Fire Hazard Severity Zone according to the current (not 2005) maps that are being used by the City. San Diego County also confirmed that the property is in a Very High Fire Hazard Severity Zone according to current maps.
So here is what appears to have happened. Disclosure Source used 2005 maps and determined that the property is not in a Very High Fire Hazard Severity Zone. The city of San Marcos and County of San Diego say that the 2005 maps are not current and that the maps now in use by the City and County show that the property is in a Very High Fire Hazard Severity Zone.
We’re waiting to get a call back from Prudential California’s David Cabot, who as EVP and Broker of Record serves as Director of Branch Administration, Accountability and Relocation. We are looking forward to his response. Will Prudential side with Disclosure Source or with the City of San Marcos and San Diego County? Will Prudential support Disclosure Source’s use of old maps or will Prudential acknowledge that Disclosure Source should have used the fire maps that are currently in use at the City and County?
Every agent and broker has experienced the pain of a lost sale. But when disclosures are made based on bad information, the lawyers come running, the costs escalate and careers as well as personal checkbooks and reputation are damaged! Everybody loses.