Reflecting on a true case, a salesperson represented three different NHD companies in less than 15 months.

Each of the three companies covers different disclosures, offers different E&O, and indicates different terms and conditions. Real estate agents have a fiduciary duty to their clients, not to salespeople. They must act in good faith in the best interests of their clients instead of following a salesperson’s personal career choices.

If a buyer sues for non-disclosure of material NHD facts, the agent will have to show “good faith” was exercised in the selection of the NHD report. California Civil Code § 1103.2 mandates sellers and their agents to exercise good faith in the selection of a third party report provider.

Before you select/refer a new NHD company you should consult with expert legal counsel and demand from the NHD company a comparison of disclosures and insurance coverages.