Is The Disclosure Source NHD Report Scaring My Buyer?

If you read our last post, it raised a lot of questions; so we started looking deeper. Disclosure Source reports come with a colorful map indicating the location of the property with an icon in the shape of a house. The map that I am looking at has a dimension of about four (4) square miles.

The map shows that the property I am researching is not in any hazard zone for Flood Hazards, Dam inundation, Very High Fire, Wild land Fire, Earthquake Fault, Seismic Hazard or Bodies of Water and Rivers. Sounds good, except that the Disclosure Source map shows a Flood Hazard Area, a Dam Inundation Area, and Bodies of Water and Rivers in close proximity to the location of the house.

We decided to investigate if there is a legal requirement for Disclosure Source to show whether the house is within a four square mile proximity to any hazards. The California Civil Code specifically reads: sellers and their agents must disclose if property is IN or NOT IN one of those hazard zones. Showing hazards within four square miles of the property is definitely not required.

California Civil Code Section 1103.2 and Civil Code Section 1103.7 specifically read: transferor(s) and their agent(s) acknowledge that they have exercised good faith in the selection of a third party report provider. Could an agent who refers his/her clients to an NHD report that exposes information not required by law and that negatively impacts the desirability and value of the property, and could ultimately scare the buyer away, be subject to a lawsuit from the seller?

Our conclusion: Exposing the proximity to hazards with a colorful map is unnecessary and a bad practice for real estate agents and sellers.

Please share with us your experiences with “the maps”. Your comments and suggestions are valuable to all our readers.