Giving credit to the Morlocks

The year, 1976. The place, Diablo, California. Some day historians will record that it all started rather innocently. Could it have been avoided? Astrologers shake their respective heads: "No," their grave response. All Letitia Easton wanted was to buy the Strassburger home: 3000 square feet, swimming pool, separate guest house. Must have been real nice. There had been some slide activity in the past, and some fill on the property had not been properly engineered and compacted. But why alarm Ms. Easton, reasoned the Strassburgers. So, Silence ruled the day. And Letitia got her home.

As I hear it, less than a year passed and a landslide occurred - this one affecting Ms. Easton's home. "Oh my, didn't you know about the awful slides in this area?" exclaimed the neighbors to a very surprised Ms. Easton. Make that, a very upset Ms. Easton. The home had cost $170,000. Repairs were estimated as high as $213,000!

In the next scene Letitia is all smiles as the jury awards her $197,000, against the Strassburgers, the listing broker, and others. Only the listing broker appealed, to the First District Court, and thus was born the landmark 1984 decision, Easton v Strassburger. Said the learned judges, concentrating on the real estate broker since it was he who appealed, the broker is liable to disclose facts materially affecting the value or desirability of the property - not only facts known to the broker, but also such facts as the broker would have uncovered through a reasonably competent and diligent inspection. Whoa. "New precedent."

There was a hue and cry in the California real estate industry: "Chicken Little was right! We'll be sued every time a shower door comes off its hinges." But all was not lost, as in 1987 the California Legislature came to the aid of sellers and their brokers. Henceforth sellers (and licensees) would be required to complete a Transfer Disclosure Statement and to deliver it to the prospective buyer. See, Seller Disclosures.


Lost in the sweep of that decision was the issue of just how far sellers and licensee have to go in divulging geologic conditions. The Strassburger home was partially on fill. What if it hadn't been? What about sellers in the Nineties who are required by law to disclose geologic hazards?

Help! Who can afford soils engineers?

Enter the Morlocks. These folk know about all manner of stuff below the ground - and about earth movement. They could have warned Letitia. But they didn't. Why should they?

However, techno-savvy younger Morlocks saw an opportunity to go mainline.

What if they were to establish a disclosure service for buyers and sellers. They could warn about earth movement, land fill, leaky underground oil tanks, and dinosaur fossils. Well, scrap the last item: that's only of interest to the very young. They could probably get $50 to $100 apiece for such reports.

The challenge was that the Morlocks were as repulsive looking as when H.G. Wells first wrote about them at the turn of the century. How would the consumer of the Nineties react if a creature rang the doorbell and announced that there was landfill down below?

In the years following the Easton decision the Morlocks, somehow, connected with several hi-tech companies who nominally became the providers of these reports. How the business has grown!

* Earthquake Fault Zones
* Areas of Liquefaction Potential
* Areas of Potential for Compressible soils and differential settlement
* Areas of Landslide Deposits
* Areas of High Potential for Earthquake-Induced Landslides
* Areas of High Potential for Salt Water Flooding
* Areas of Dam Inundation
* Areas of Flood hazards
* Areas near leaking underground storage tanks

Amazing. Give 'em an address, and they'll come back with a report on your neighborhood.

The reports, Natural Hazard Disclosure Statements are now regulated by the Legislature. See, Seller Disclosures.

Copyright ©1996 through current year, Leopold A Rodriguez
All Rights Reserved