Monday, October 20, 2008

Western North Carolina Mountain Real Estate

Real estate contracts do not reveal and developers do not discuss Western North Carolina's significant hazardous soil conditions.

Federal and state professionals who have investigated and mapped the region over the past several decades have determined that weak reactive mountain soils undermine building locations throughout the multi-county area. Unstable soils are definable and measurable geologic hazards that can threaten lives and property. Extensive soil stability tests have proven that most mountain slopes are “unsuitable” or “poorly suitable” for subdivision development.

Soil assessment surveys for the following Western North Carolina counties: Ashe, Avery, Burke, Caldwell, McDowell, Madison, Rutherford and Yancey can be viewed on the United States Department of Agriculture Natural Resources Conservation website.

Surveys for the remaining counties: Alleghany, Buncombe, Cherokee, Clay, Graham, Haywood, Henderson, Jackson, Macon, Mitchell, Surry, Swain, Transylvania, Watauga, and Wilkes can be found in local Soil and Conservation offices.

Note: Buncombe County officials reported in August 2004 that the county’s mountain land was highly susceptible to slope failures. The Hazard Mitigation Plan found that the steep slopes and fragile soils of Western North Carolina ranked the county at high risk of landslides. These historic data-based determinations were made before the rain-triggered 15 county landslide disasters of September 2004.

The recently completed 2008 Madison County Soil Survey findings illustrate the safety concerns that are common throughout the 23 county region. The surveyors advise on page 476 of their report that environmental issues and geologic faults severely limit subdivision building sites throughout the municipality. The researchers also note that some soils are not adaptable for development.

Soil studies provide invaluable information and are intended to protect the interests of prospective buyers. In North Carolina there is no state governance over hazardous land development, so county commissioners, their planning boards and developers are not obliged to consider soil assessments. Buyers are also disadvantaged by the fact that the state does not require land risk disclosures on real estate contracts.

Some proactive consumer rights' states, notably California and Colorado, have passed legislation to prevent developers and sellers from taking advantage of uninformed buyers. For instance, Colorado enacted the Soils and Hazard Analyses of Residential Construction Act in 1984. This bill requires that all developers and sellers provide purchasers of new residences with a copy of the property’s soil survey and site recommendations. This report must be given to prospective buyers no later than 14 days prior to closing.

Western North Carolina Mountain Developers and the Interstate Land Sales Full Disclosure Act.

Even though North Carolina does not require land risk disclosure, prospective buyers of undeveloped land can find protection and relief under federal law.

In 1968 Congress passed the Interstate Land Sales Full Disclosure Act to protect consumers from fraudulent and abusive land sale practices. This law requires land developers to register their subdivision plans for a 100 or more non-exempt lots with the U.S. Department of Housing and Urban Development (HUD) and to provide purchasers with a detailed Property Report. The sale of condominiums is also covered under the Act.

Most of the developers who are conducting business in Western North Carolina are subject to federal law under the Interstate Land Sales Full Disclosure Act. For a list of registered developers and subdivisions please visit the United States Department of Housing and Urban Development website.

Occasionally a developer neglects to file a statement of record with HUD and also fails to provide purchasers with Property Reports. For examples of penalties imposed on developers please visit the Interstate Land Sales Settlement Agreement website.

The Property Report

A Property Report is the most relevant document that a prospective buyer will receive when considering a land purchase in a yet-to-be completed subdivision. It is uniform in design and table of contents.

The Report is intended to be revealing so that buyers can make an informed decision about the present and future value of the land being offered for sale. All material facts must be disclosed. For instance, HUD forces the developer to list all mortgages and liens on the property. The following warning is included on all Property Reports: "A restriction or an encumbrance on your lot or on the Subdivision, could adversely affect title to your lot."

Other sections of the Report define the developer's financial responsibilities for the project's infrastructure.

Equally important developers are required to provide specific data about geologic hazards in the subdivision such as soil instability, flooding and landslides.

Western North Carolina mountain developers who are subject to the Act should disclose the following material information under the Land Characteristics and Climate/Hazard Section of their Property Reports:

1. The land in this mountain subdivision is naturally hazardous. Geologists and soil experts suspect that the lots in this subdivision are at risk of slope failure. Homeowner policies will not cover this damage.

2. This subdivision was approved without hazard mapping and under regulations that did not require site specific stability studies.
Another section of the report defines financial responsibilities for the Property Owner's Association.If applicable, the following should be disclosed:

Roads in this subdivision are private and will be maintained by the Property Owner's Association after the developer's obligations are satisfied. Subdivision roads are presently stable but are subject to erosion and slope failure. All future road costs will be shared by members of the association.

Developers who fail to disclose Western North Carolina's land hazards in their Property Reports are in violation of federal law.


Most states and municipalities ignore soil assessments and permit development on hazardous ground. The following news reports illustrate the disasterous consequences.

"A House Divided, Parts 1 & 2," CNN September 2007. (Sedonia, Arizonia)

"That Sinking Feeling" Chicago Magazine-October 2006

"West Hills home smashed in landslide" The Oregonian-October 2008

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