Are You Increasing Your Liability?

It’s tough enough to sell a home today. So why are agents allowing themselves to be misled by 3rd party reports and potentially sabotaging their deals and careers when they bring up problems about a property based on inaccurate information?

For example, why are agents misguided by following companies like First American-owned JCP-LGS to that include natural gas pipeline disclosures in their NHD reports?

No law in California requires sellers, agents, brokers or NHD companies to provide a natural gas transmission pipeline disclosure to a buyer. What liability can come from the urge to disclose this information?

We believe it’s risky and irresponsible for any agent to go too far.

It’s really sad, but today there are only inaccurate and incomplete maps for these underground gas lines because PG&E, Southern California Gas and others today claim this is the result of the merger and acquisition of many older independent companies. Their maps are, in many cases, non-existent. For example, it took months to figure out what happened in San Bruno when PG&E’s gas pipe exploded. Turned out, it was a faulty weld. No NHD report would ever have shown that!

Sure we commend the intent of every agent to disclose fully. It feels honorable, right?

But consider this, if an agent discloses that there’s an old gas line near the property, that agent may be taking financial responsibility for the possible damage or lost sale because the agent, by providing the information, gives the impression that this disclosure is as well-founded as any other accurately mapped hazard.

CAR spells this out quite clearly in its newly revised Statewide Buyer and Seller Advisory, stating: “Brokers do not have expertise in this area. Consult with appropriate experts during the buyer’s investigation contingency period.” An agent who introduces this pipeline information into the sales transaction may have opened him or herself up to an unnecessary liability.

Don’t make selling homes harder than it already is, and most importantly don’t be fooled or trapped into giving away your business, when it’s not the law.

  • m ford

    good advice indeed! i am frequently battling agents that demand certain “disclosures” be used because their broker wants them. i tell them their brokers file requirements are not mine and that they will get only those disclosures as are required by law.

    truthful and accurate disclosure is the name of the game…not hanging ones ass out for the hit.

    • RE-Insider

      Well said. It is essential that real estate agents understand that it is their license on the line, not the brokers. We all know that the banks and the brokers look out for themselves, so now it’s time for agents to do the same.

  • Henri Matheson

    I recently was looking to buy a house in California, and a friend told me about these newsletter-type webpages to check out. The webpages were run by agents, but there were Fidelity logos in the top right corner, and the page had a link making it very easy to order NHD Reports. Do different companies pay for these reports or can they be provided by the state? I’m baffled by all this.

    • RE-Insider

      Thanks for the comment Henri. You have every right to dictate which companies to use for all services – be sure to make it clear to your agent that you have a preferred company for any part of the transaction. If the agent/broker still refuses to use the provider you ask for, let us know!