A listing agent orders an NHD report that shows no seismic hazard designation. After the report is prepared, the California Geological Survey updates its maps and places the property within a Seismic Hazard Zone. The buyer's agent discovers the new designation before closing. Under California law, how is liability most likely allocated for the outdated NHD information?
Correct Answer
D) The listing agent may be shielded from liability by good-faith reliance on the report, while the NHD company may bear liability if the updated maps were available when the report was prepared
California Civil Code §1103.4 provides that a listing agent who relies in good faith on a third-party NHD report is not liable for errors in that report. However, NHD companies have a duty of reasonable care in preparing reports, which includes using maps that are current and publicly available at the time of preparation. If the CGS update was accessible when the report was issued and the company failed to incorporate it, the company may face negligence liability for the omission.
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