If a Home Is in a Dangerous Zone, the Seller Must Tell All

You may be living in a danger zone.

That’s right: Your residence could very well be identified by federal, state or local authorities as being situated in an area where harm may result from earthquakes, floods, fire and proximity to toxic waste, or even a former munitions site.

If you sell your property without notifying the buyer of all these possible problems, an expensive lawsuit may result. Fulfilling all your obligations as a seller also provides the buyer with more reasons to pull out of the deal.

“Every time I turn around, we’re doing another disclosure,” said Kay Cole, vice president and branch manager at Prudential California Realty in Woodland Hills. “Just about every community in the Valley falls within some sort of zone that needs to be disclosed to a buyer.”

“Ignorance is no defense to these disclosure requirements,” warned Debra L. Fink, vice president and general counsel at the Jon Douglas Co. And “simply asking an agent to do something doesn’t relieve the seller of responsibility.”

Like everything else, it’s essential to get informed.

First, there are so-called Alquist-Priolo special study zones. These are areas mapped by the state’s Division of Mines and Geology as having fault rupture hazard potential. In plain English, that means that your house is on an earthquake fault. There are 534 separate maps, or quadrangles, outlining these study zones--each quadrangle covers 16 square miles. Danger zones include Sylmar, Tujunga, the northern tip of Granada Hills and parts of Ventura County. Most of these zones were identified in the 1970s.

Maps detailing the locations of these special study zones are available through local planning departments, the state Division of Mines and Geology in Sacramento and the library at the San Fernando Valley Board of Realtors in Van Nuys, or through BPS Reprographic Services in San Francisco.

Then there are seismic hazard zones. These are areas with risks of amplified ground shaking, liquefaction (loss of ground strength) and earthquake-induced landslides. Sellers are required to tell buyers if the residential property being sold is within one of these zones.

The only problem is that the state is behind schedule and hasn’t yet mapped where these zones are. Also behind schedule is a “Homeowners Guide to Earthquake Safety,” which was supposed to be ready as part of a new law that requires distribution of these guides to home buyers starting July 1.

Other home sale disclosure requirements include special flood hazard areas. These are identified on Flood Insurance Rate Maps established by the Federal Emergency Management Agency. Owners within these zones, which cover a wide cross-section of the San Fernando Valley and Ventura County, are required to have flood insurance (which can run between $400 and $500 a year) if the owner has a mortgage with a federally insured lender--and that’s just about every borrower.

Lenders are only starting to enforce these rules, which evolved out of the Flood Disaster Protection Act of 1973. Information is available from FEMA at (800) 638-6620.

Sellers of residential property with one to four units are required to disclose to a buyer any “actual knowledge” of a former federal or state ordnance (explosive munitions) location within one mile of the property. This was added to the state’s Civil Code in 1989 after a tragic accident involving children at play near San Diego. The problem with compliance, however, is ferreting out information about these sites when much of this information is classified.

Sellers within a state fire responsibility area must tell buyers that the property is in a wild-land area. These zones pose a substantial risk of forest fire, and the state is not responsible for providing fire protection unless the Department of Forestry and Fire Protection has an agreement with a local fire protection agency. This disclosure requirement was added to the Public Resources Code effective July 1, 1991.

Property within 2,000 feet of a hazardous waste site may also be subject to certain disclosure requirements imposed by the California Health and Safety Code. The California Department of Toxic Substances Control has lists of identified toxic sites and border zones. Property owners within designated border zones must disclose this information. If your property hasn’t been the subject of a public hearing, however, you’re probably not in an official border zone, although some disclosure is still advised.

There’s also radon gas in Encino and Tarzana, unstable soil in parts of Woodland Hills and Thousand Oaks, and special fire hazards in parts of Burbank and San Fernando. And, besides all these zones of danger, there is a long list of other disclosures that must be made to a buyer of real property.

These other disclosure requirements, however, are particular to the home as opposed to the zone in which it happens to be. Most of these disclosures can be made as part of the standard property transfer disclosure form. More information can be found in a booklet called “Disclosures in Real Estate Transactions,” published by the California Department of Real Estate.

“What I tell my sellers the minute I list a house is, ‘As of today, jot down any little thing you think might affect the value of your property’--and that includes the barking dog next door,” said Lorrie Griffey, manager at Pinnacle Estate Properties Inc. in Northridge and president of San Fernando Valley Board of Realtors. “There’s good reason for the seller to worry about getting sued.”

Agents and owners are being sued for not disclosing bad paint jobs and even bathtubs that don’t comfortably accommodate portly purchasers. Yes, that was a real lawsuit! If the home is near a landfill, next door to a crying baby, on a busy street or surrounded by inconsiderate neighbors, Griffey includes this information as part of her disclosures to buyers.

It’s not particularly pleasant for the seller who must seemingly highlight every flaw, said Griffey, but it’s the law.

“You’re going to see coming down the pike more and more property disclosure requirements,” predicted Al Herion, president of Burbank-based DCI Services Inc. For $25, DCI provides property owners with a report that tells them whether a particular house is in an earthquake, flood or toxic substances zone.

While all this information is publicly available, many of Herion’s customers prefer to avoid the hours of waiting in line at public counters.