A California listing agent knows from personal experience that a property in Pacific Palisades is in an area that frequently experiences coastal erosion and mudslides. The NHD report does not flag the property for any of the six statutory hazard zones. The agent provides only the NHD report and does not separately disclose the erosion and mudslide risk. After closing, a mudslide damages the property. What liability does the listing agent face?
Correct Answer
B) Liability under Cal. Civil Code §2079 for failing to disclose known material facts beyond the scope of the NHD
While the NHD covers six statutory zones, the listing agent has an independent duty under Cal. Civil Code §2079 and general agency law to disclose all known material facts. The agent's personal knowledge of coastal erosion and mudslide risk constitutes a material fact that must be disclosed to the buyer, even if the NHD does not flag it. Failure to disclose this information exposes the agent to liability.
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A buyer in Sacramento receives the NHD report and notices it indicates the property is in an 'Area of Potential Flooding.' This is different from the FEMA Special Flood Hazard Area. What does the 'Area of Potential Flooding' designation refer to?
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