Western North Carolina Developers Permitted to Build on Hazardous Land

After experiencing decades of land development disasters, California acted in 1998 to stop the construction of homes and residential communities in identified hazardous regions. The state notified regulators and Realtors that all permits for geologically suspect land would require risk analysis: site specific proof that the proposed project would not be a danger to lives and property.

California lawmakers also established a special "buyer beware" classification for all real property sold in designated hazard areas. For the first time, interested buyers were advised of natural hazard property risks with a pre-sale "show and tell" disclosure statement. This statement provides clear warning that the purchase of land in natural hazard zones... "May limit owner's ability to develop property, obtain insurance, or to receive assistance after a disaster."

Most people are aware that California landslides are frequent, sometimes deadly, and always financially devastating. But what the public doesn't know is that Western North Carolina landslides are also common, sometimes lethal, and always financially ruinous.

North Carolina is a build anywhere state. Even though the 21 counties that comprise Western North Carolina were designated a high risk landslide region in 1998, and 15 counties were declared federal disaster areas in 2004, there are no state regulations governing hazardous land development and risk disclosure is not required.

Nationally recognized real estate development companies are taking advantage of North Carolina's industry friendly environment and are currently constructing expansive resorts on ancient landslide terrain. The following are some of the largest residential projects underway in Western North Carolina:

The Cliffs at High Carolina: 2500 acres (The Cliffs Communities)
Laurelmor: 6000 acres (Ginn Resort Property)
Balsam Mountain Preserve: 4400 acres (A Chaffin/Light Community)
Grey Rock at Lake Lure: 4000 acres (Land Resource Companies)
Bear Lake Reserve: 2100 acres (Centex Destination Properties)

By coincidence or by design these five residential/resort developments were approved before the federally mandated "Is It Safe to Build Here?" landslide mapping program could be initiated.
How many of these mountain slope communities are sitting on ancient landslide sites? This serious question can only be answered by the North Carolina Geological Survey and they were not invited to investigate the safety of these projects.

The reason for regulations.

In 1998 a massive, artificially created slope collapsed in Laguna Niguel, California. This landslide crumpled homes and caused more than $23 million in property loss. Post disaster investigation proved that construction on what should have been a "no build site" had reactivated an ancient landslide. For photographs please visit Laguna Niguel landslide.

Kite Hill is another residential neighborhood in the area that has suffered extensive landslide damage.

Slope failures continue to threaten property owners. The latest landslide damage in Laguna Niguel occurred in October 2007.


"Kite Hill residents picket builder"

Dispute: The Laguna Niguel homeowners, upset that they were not warned about unstable soil, protest at a new tract nearby.

June 14, 1998

By Joseph J. Nelson

The Orange County Register

Laguna Niguel- A portion of a new hillside housing tract opened Saturday as sign-carrying, chanting protesters issued a warning to prospective homebuyers: Check the soil reports and grading records before opening escrow.

Five Kite Hill homeowners who are suing their developer alleging defective construction and fraud picketed before the entry gates of the builder's nearby Hillcrest Estate project. They complained of cracked walls and shifting earth that have plagued them for years.

"I really wish someone had warned us about soils conditions at Kite Hill before we bought our homes," said protester Joan Leeb.

Leeb, along with her four Chat Drive neighbors, says they found out too late that the hillside on which their homes were built was unstable and reinforced in 1985 before the homes were built.

Now, they say, the hillside isn't holding up. Walls and swimming pools are cracking, concrete pylons are ripping away from divider walls, and back yards have dropped up to a foot in some places over the past two years.

The same developer, S&S Construction, is building the Hillcrest homes, priced at $500,000 and up, on land that geotechnical reports indicate is an ancient landslide deposit.

Christine Herdman, an attorney for S&S Construction, said the developer has responded to the Kite Hill homeowners' complaints and has made several repairs to each of the homes.

"It is not our practice to get into lawsuits with our customers, and we have a history of where we have gone out and (performed) repairs on homes after the 10 year statute of limitations ran out," Herdman said.

Herdman added that the developer had offered to install caissons under Roy and Ann Brown's home, which had suffered the most cracking, and to buy the house at fair market value.

The Browns said they declined the offer by S&S to install caissons after they were told by the developer that a report on the geological inspection done by an S&S contractor wasn't available. Herdman said reports can't always be provided immediately upon request.

"How are you supposed to make a decision of that magnitude when they don't have a report to provide you?" Roy Brown said.

On the advice of their attorney, Serge Tomassian, the five homeowners hired their own
geotechnical expert, David Lee, who drilled a hole 75 feet deep into the back yard of Steve and Sue Guenther's home. Lee concluded that a clay seam 40 feet below the surface was contributing to the slope's instability.

"I'm not saying the hillside could or might slide," Lee said. "I'm saying that there will be a landslide at some point in time in that area."

Herdman disagrees.

"There is agreement that movement exists on the slope," she said, "but there is a fundamental disagreement between our geotechnical experts and the homebuyers' geotechnical experts over the severity of the movement."

Geotechnical experts for S&S Construction were unavailable for comment.

Two years ago, the homeowners sued S&S Construction, alleging construction defects. In April, they amended their case to include fraud, contending the developer was aware of the slope problems and should have warned them.

"My clients want a complete repair that will last." Tomassian said. "We don't want to be reading on the front pages about this hillside collapsing a year from now."

Herdman said all slope instability problems on Chat Drive were corrected by graders before the homes were built. The company had no legal obligation to disclose the area's geological history to homeowners.

"I think it is far-reaching at this point to say that these homes are imperiled," she said. "The conditions of distress vary in each home, and we believe the matter requires further investigation."

The five homes sit side by side on an area of hillside that was determined to be unstable in a 1984 report by Leighton & Associates, a geotechnical consultant hired by the builder. The firm also was the consultant on the Hillcrest Estates project.

The hillside was buttressed, which entails cutting away a portion of the hillside and then recompacting the soil back into the cut for reinforcement.

As drivers stopped to ask protesters questions and received fliers, others shopped the new homes into the development.

Hillcrest Estates is showcasing 18 homes this week. A lottery will be conducted, and the winners who are approved for the homes will be announced Saturday. The development ultimately will have 185 homes.

Scott and Samantha Spearman, who came to Hillcrest to shop for homes with their infant daughter, said that they were surprised by the picketing.

"Honestly, it wasn't even on my mind today until I drove in here," Scott Spearman said, referring to the soils reports and ancient landslide areas within the development. "Seeing these picketers at a new development raises a red flag with me, and I'll look more carefully into buying a house up there."