Disclosure Fraud?

an eye looking through a crack

California Code ยง 1103.2 et al. mandates that every Seller of a property, or his designated Agent, discloses ALL Natural Hazards that materially affect the value and desirability of a property to a prospective buyer. A Seller and/or his Agent is charged with a fiduciary duty to do DUE DILIGENCE regarding the completeness and accuracy of the disclosure information provided. Often this disclosure information is purchased from a Natural Hazard Disclosure Company (NHDC). The duty of a Seller and their agent to provide accurate disclosures to a Buyer cannot be waived or transferred to another party.

The Problem: The Agent chooses the NHDC that is the cheapest or the NHDC that is providing them or their broker with a kickback without regard to its accuracy or completeness. Buyers often get an inaccurate, incomplete report.

How does this affect the Buyer: By receiving this inaccurate or incomplete report, the Buyer:

  1. May have paid too much for their property due to undisclosed undesirable factors.
  2. May not be able to build on their property.
  3. May have unknown tax assessments
  4. May unknowingly be in high-fire zones and deprived of insurance.
  5. May be in unknowingly in liquefaction or seismic zones
  6. May be in flood zones and and need flood insurance
  7. And other non-disclosed noise, industrial, radon etc. issues.