Using Maps in Real Estate NHD Reports = Dangerous Gimmick

When Carlos Siderman created the Natural Hazard Disclosure report over 30 years ago, he was striving to create a report that would insulate the sellers, buyers, agents and others like escrow officers, from the liability associated with lack of complete and accurate disclosure sources as required by California law.  To keep the document legally relevant, only those items that are required by law were included. 


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This new Disclosure industry is not regulated by a government body and thus became very attractive.  Virtually anybody, regardless of education, experience or background, could set up shop in a garage, buy data, print a report, and call it a ‘Natural Hazard Disclosure Report.’ And so they did. Geologists, toilet replacement contractors, title companies, and even the California Association of Real Estate (CAR), opened up NHD companies and began selling to agents what they called the ‘best’ report.  Most of these people and organizations have no background in legal issues or disclosures and simply purchase data and print it, and use a ‘limits of liability page’ to shield themselves – not agents – against lawsuits.  While these companies copied the format that Property I.D. Corporation uses, and while they state that they are ‘the same as Property I.D. but cost less’, they are not the same by any means.


The winners in this new industry became these overnight NHD companies, most of which have disappeared over the years.  The losers because the brokers, agents, sellers, and home buyers who bought into the idea that a report containing information so important that it is one of only two items that can be used to rescind a real estate contract, could be thrown together in a home office using purchased data (often out of date).  These new companies preyed on the fact that the agents had no time to research the information themselves.  The agents’ lack of time is the very reason Carlos Siderman originally put the comprehensive report together.  


Some of these NHD companies have tried to make their reports seem more important by adding items not required such as “Advisories”.  Others opted to make their report more colorful by adding maps. Unfortunately these maps disclose items outside the subject property boundaries and are in conflict with many NHD specific disclosures statues that require real estate information about whether the property is IN or NOT in a specific Hazard zone. Maps can actually cost a sale


For example, what If a map shows that an earthquake fault miles away from the home being sold and outside of the zone legally required to disclosure, but the buyer backs out of the deal based on that over-disclosure? An agent is going to have an upset, possibly litigious seller! In addition, each one of those NHD companies uses different sized maps so you might get 4 miles of over disclosure with one company and 6 miles of over disclosure with another. Remember -

A buyer has a 3-day right of rescission and could walk away from a deal based on the agent’s over disclosure caused by a map in the natural hazard zone statement.


An agent should be aware that if called into court, she could be required to discuss and interpret the map, thus an agent could be setting herself up for problems caused by a gimmick that does not increase the value of a property and will not help the client understand the requirements of law. There is no ‘good news’ about having natural hazards in proximity to your property. Maps can only bring about diminution of value and desirability for your property.


Property ID Corporation remains committed to the original foundation on which the company was build: Complete and Accurate disclosure that insulates real estate agents and their clients from liability, without gimmicks.

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