Sham NHD Companies

The majority of all California home buyers in the last 10 years have received incomplete and inaccurate legally mandated NHD disclosures. The California code puts the duty to disclose squarely on the shoulders of the Seller and his or her Agent. Additionally, an Agent has a fiduciary duty to protect his Seller from liability by choosing the best NHD Report, not the cheapest or the one that pays the Agent a kickback. The Statute of Limitations allows homeowners to bring those claims today.

Real Estate Brokers and Agents over the past decade have fallen prey to fly-by-night NHD companies that offer low prices for bare-minimum Disclosures. NHD companies are not regulated and thus no licenses, background checks or bonds are necessary to put a shingle on the door. Brokers are often duped into buying data from these garage-based companies, putting their own labels on them and then selling these Sham reports as their 'own NHDs', only to be sued later on as the perpetrators of bad data. Most often these are settled out of court by the Brokers.

Another issue that has hit Homeowners hard is that most of the NHD companies limit their liability for incorrect and incomplete reports in their Terms and Conditions, rendering the Report useless. Every Report is a 'liability policy' against undisclosed natural hazards. When a company states that they do not guarantee the correctness of their report, the report is useless and should never have been used to close the escrow.