Real Estate Commission Rules Western North Carolina Landslide Maps Must be Disclosed

North Carolina Real Estate Commission

In a recent article the Macon County News reported that Realtors and developers conducting business in landslide-mapped counties must reference hazard maps on property listings and in sales contracts. According to the newspaper, the North Carolina Real Estate commission has determined that landslide maps are material facts for sales transactions in Buncombe, Macon and Watauga Counties.

The North Carolina Real Estate Commission has not posted this ruling so there are unanswered questions. When asked for specifics re the Macon County article, the Commission's spokeman responded, "all material facts must be disclosed."

All that is known, is that Macon County Realtors were informed of the North Carolina Real Estate Commission’s findings during a May 20, 2010 meeting. Reference: Macon County News—“Realtors, developers grapple with the implications of disclosure req’s for landslide hazard maps"— June 17, 2010.

Buncombe, Watauga & Macon County Landslide Hazard Maps

Buncombe, Watauga and Macon County landslide/soil hazard maps illustrate the danger of building on unstable ground. The risk data shows past slope movement, where landslides are likely to originate, and where these destructive forces will travel. Henderson County landslide maps are pending. Jackson County will follow.

For additional information please contact the North Carolina Geological Survey.

Buncombe County Landslide Hazard Maps





Watauga County Landslide Hazard Maps






Macon County Landslide Hazard Maps






North Carolina Residential Property Disclosure Statement

For financial reasons the landslide map disclosure rule has not been well-received by many in the real estate community. Those opposing this fair warning inclusion should read the North Carolina Residential Property Disclosure Statement. This document presently requires notification of whether saleable property is located in a federally-designated flood plain. Without this caveat property owners would not know the risks and the importance of obtaining federal flood insurance.

Owners of landslide-prone real estate have no such safeguards. The fact is there is no federally subsidized landslide insurance program and industry underwriters will not insure properties located in areas like Western North Carolina.

Federal Emergency Management Agency

Western North Carolina mountain slope development has been a federal concern for more than a decade. Emergency management officials notified county governments in 1998 that significant tracts of land under their jurisdiction were not suitable or safe for development because of landslide hazards. FEMA classifies the following counties high risk:

Alleghany, Ashe, Avery, Buncombe, Burke, Caldwell, Cherokee, Clay, Graham, Haywood, Henderson, Jackson, McDowell, Macon, Madison, Mitchell, Surry, Swain, Transylvania, Watauga, and Yancey.

Western North Carolina Landslide Disasters

Intense rainfall triggered multi-county landslides in September 2004. For receipt of $72 million in federal emergency funds the state agreed to accelerate the Western North Carolina landslide mapping program. The Hurricane Recovery Act of February 2005provides a description of the harm caused by these storms:

Hurricanes Frances and Ivan wrought havoc upon Western North Carolina impacting the region on a scale not experienced before in that area of the State. The President issued two federal disaster declarations for the Western Region of the State. During Hurricane Ivan, the community of Peeks Creek was devastated by a debris flow triggered by heavy rains. The debris flow traveled speeds as great as 33 miles per hour for two and a quarter miles from the top of Fishhawk mountain. Five persons were killed and 15 homes destroyed by the flow that was estimated to be several hundred feet wide and up to 40 feet high. Other communities that were particularly hard hit by landslides include the Starnes Creek area in Buncombe County, the Little Pine area in Madison County, the White Laurel community in Watauga County, and the Bear Rock Estates in Henderson County. Further...people could not know the landslide risks associated with their housing location because such maps are not readily available. The state needs to...prepare landslide mapping for the region so that homes may be built in safe areas.

Western North Carolina Landslide Maps

When the first of the Western North Carolina landslide maps were released in 2006 then-Governor Mike Easley stressed their importance for all parties:

"These maps will show which areas are prone to landslides and that will help developers, county officials, and residents decide where to safely build homes, roads, and other structures."

Rhetoric aside, state legislators have not had much interest in identifying the region’s landslide-prone real estate. Since 2005 only three counties have been mapped: Macon 2006, Watauga 2008 and Buncombe 2009.

Landslide Hazard Disclosure Statement

Macon County Realtors told the newspaper that they understand the North Carolina Real Estate Commission’s decision but are uncertain of how to proceed. In the absence of state guidelines, Realtors and developers could avoid charges of fraud by including the following disclosure statement on property listings and in sales contracts:

Real property in this county has been evaluated for landslide risks. Landslide hazard maps are available online through the North Carolina Geological Survey.

The decision to buy landslide-hazardous real estate should be well-considered. Landslide insurance is not obtainable in this county. The inability to insure this special-risk real estate will likely have an adverse effect on property values and mortgage refinancing.

The maps and reports generated by the North Carolina Geological Survey for this county are “best guess” estimations of unstable conditions. All questionable building sites should be investigated by state licensed engineers.

Failure to Communicate

Although never recorded on subdivision plats or noted on real estate documents Western North Carolina hazardous-land conditions have been a material fact for years. It can be argued that Realtors should have disclosed the existence of and the need for the Mapping Program in 2005.

The North Carolina Real Estate Commission's ruling offers cautionary advice: there are consequences for withholding material information.

The Hills of Rivermist and Ghost Town in the Sky Landslide Disasters

The Hills of Rivermist and Ghost Town in the Sky landslide photographs display the damage caused by improperly-designed retaining walls.



Photo of The Hills of Rivermist landslide damage
Rodolfo Gonzalez/Austin American-Statesman


Photos of the Ghost Town in the Sky landslide damage—Asheville Citizen-Times
Flyover video provided by WSPA News



Landslide-prevention walls are expensive engineering projects and as a consequence companies often choose to bypass building codes. These business decisions violate the rules and endanger lives.

The following case histories outline the corporate actions that led to The Hills of Rivermist and Ghost Town in the Sky retaining wall failures.

The Hills of Rivermist Landslide
State of Emergency—January 24, 2010

Scores of families were forced to evacuate their homes after sections of The Hills of Rivermist Subdivision retaining wall broke apart. Twenty-seven homes in the hazard zone remain vacant due to safety concerns.


Photo of Hills of Rivermist Subdivision
prior to retaining wall collapse.
Circle marks location of wall
breaches— Dave's Landslide Blog.

For chronological reports on
The Hills of Rivermist Subdivision
landslide please visit Homeowners of Texas Web site.




Centex, the developer of The Hills of Rivermist, has offered to repurchase these still-at-risk properties and has agreed to construct a new wall at an estimated cost of $4-5 million.

In disregard of building codes the Centex /Hills of Rivermist Subdivision landslide-prevention wall was constructed without city inspection. San Antonio officials have established that the structure did not meet engineering specifications for Bexar County’s expansive soil conditions.

Since the landslide, Rivermist property owners have been informed by an advocacy group, Homeowners of Texas, that 94.6% of soil types supporting homes and roads in their subdivision will shrink and swell. Data compiled in the 60s and 70s by the FHA and Bexar County soil scientists found that these unstable soil compositions will cause severe structural damage. Rivermist property owners have also learned that an earlier Centex landslide-barrier wall failed.

As of June 18, 2010, plans for the new wall remain under review by Centex and the Rivermist Homeowners’ Association. Should Centex default on its obligation, responsibility will shift to the property owners.

Ghost Town in the Sky Landslide
State of Emergency—February 5, 2010

Ghost Town in the Sky's failed retaining walls unleashed a debris flow that sideswiped homes and severely damaged state-owned Rich Cove Road. The walls at issue were constructed in 2007 and 2008 without required state supervision and inspection. In March 2009, owners of the amusement park, Ghost Town Partners, LLC, were privately advised that their $600,000 constructed walls were deficient and likely to fail. Pat Burgin, the contract engineer, found:

It is the opinion of the engineer, based on site observations, experience with local soil properties and MSE structure design, the primary cause of the MSE wall movements are due to improper construction of the wall. The soil reinforcement component of the design may be inadequate and/or improperly installed. In addition, the design of the wall may be incorrect for the specific site. The MSE wall is not functioning as intended at this time and structural failure of the wall is possible if not replaced.

Instead of notifying authorities of the potential landslide hazard and assuming responsibility for the flawed retaining walls, Steve Shiver President of Ghost Town Partners and his co-investors, filed for bankruptcy protection.

Bankruptcy rules require petitioners to maintain insurance protection during reorganization. First Mercury Insurance, underwriter for Ghost's Town's liability policy, cancelled coverage on January 28, 2010 for the company's failure to pay premiums. The policy was reinstated shortly after the Ghost Town landslide. First Mercury has declined claims for losses incurred during the lapse period. For a list of Ghost Town creditors please see Bankruptcy Case No: 09-10271.

On May 19, 2010 federally-funded contract engineers advised Maggie Valley officials and residents that the Ghost Town in the Sky site contains up to 16,000 tons of remaining unstable material. The Ghost Town in the Sky hazard is classified as an “impending or active slope failure.”

When funds are received, engineers plan on returning the mountain slope to its natural state by removing developer’s loose fill. Due to unstable conditions heavy equipment will not be allowed on the worksite. Some of the soil removal will be undertaken with shovels and wheelbarrows.

Most of the $1.4 million Ghost Town in the Sky landslide-mitigation project is being underwritten by a federal grant. Additional monies will come from the North Carolina Department of Transportation. The town of Maggie Valley and Ghost Town owners have offered contributions of $25,000 each.

Where are the Criminal Indictments?

Centex, now part of Pulte Group, Inc., is currently the largest U. S. homebuilder and is doing business in North Carolina. It is not well-known but Centex has a history of building subdivisions on hazardous-land tracts.

Ghost Town Partners, LLC is a North Carolina entity that was formed to own and operate an amusement park.

Evidence supplied by the media and other parties suggest that Centex and Ghost Town principals engaged in grossly negligent behavior that resulted in reckless endangerment. Even though these landslide-prevention walls are located in different states and were erected by separate business entities the corporate mindset was identical: build without permit and mandatory inspection.

Reckless endangerment is the failure to use reasonable care to avoid consequences that threaten or harm the safety of the public and that are the foreseeable outcome of acting in a particular manner.

The decision to prosecute Centex and Ghost Town in the Sky officials for grossly negligent behavior rests with state and federal law enforcement. Considering the facts, it is thought-provoking that no government agency has opened criminal investigations into the cause of these emergencies.

The Hills of Rivermist and Ghost Town in the Sky Landslide Disasters

The Hills of Rivermist and Ghost Town in the Sky landslide photographs display the damage caused by improperly-designed retaining walls.



Photo of The Hills of Rivermist landslide damage
Rodolfo Gonzalez/Austin American-Statesman


Photos of the Ghost Town in the Sky landslide damage—Asheville Citizen-Times
Flyover video provided by WSPA News



Landslide-prevention walls are expensive engineering projects and as a consequence companies often choose to bypass building codes. These business decisions violate the rules and endanger lives.

The following case histories outline the corporate actions that led to The Hills of Rivermist and Ghost Town in the Sky retaining wall failures.

The Hills of Rivermist Landslide
State of Emergency—January 24, 2010

Scores of families were forced to evacuate their homes after sections of The Hills of Rivermist Subdivision retaining wall broke apart. Twenty-seven homes in the hazard zone remain vacant due to safety concerns.


Photo of Hills of Rivermist Subdivision
prior to retaining wall collapse.
Circle marks location of wall
breaches— Dave's Landslide Blog.

For chronological reports on
The Hills of Rivermist Subdivision
landslide please visit Homeowners of Texas Web site.




Centex, the developer of The Hills of Rivermist, has offered to repurchase these still-at-risk properties and has agreed to construct a new wall at an estimated cost of $4-5 million.

In disregard of building codes the Centex /Hills of Rivermist Subdivision landslide-prevention wall was constructed without city inspection. San Antonio officials have established that the structure did not meet engineering specifications for Bexar County’s expansive soil conditions.

Since the landslide, Rivermist property owners have been informed by an advocacy group, Homeowners of Texas, that 94.6% of soil types supporting homes and roads in their subdivision will shrink and swell. Data compiled in the 60s and 70s by the FHA and Bexar County soil scientists found that these unstable soil compositions will cause severe structural damage. Rivermist property owners have also learned that an earlier Centex landslide-barrier wall failed.
As of June 18, 2010, plans for the new wall remain under review by Centex and the Rivermist Homeowners’ Association. Should Centex default on its obligation, responsibility will shift to the property owners.

Ghost Town in the Sky Landslide
State of Emergency—February 5, 2010

Ghost Town in the Sky's failed retaining walls unleashed a debris flow that sideswiped homes and severely damaged state-owned Rich Cove Road. The walls at issue were constructed in 2007 and 2008 without required state supervision and inspection. In March 2009, owners of the amusement park, Ghost Town Partners, LLC, were privately advised that their $600,000 constructed walls were deficient and likely to fail. Pat Burgin, the contract engineer, found:

It is the opinion of the engineer, based on site observations, experience with local soil properties and MSE structure design, the primary cause of the MSE wall movements are due to improper construction of the wall. The soil reinforcement component of the design may be inadequate and/or improperly installed. In addition, the design of the wall may be incorrect for the specific site. The MSE wall is not functioning as intended at this time and structural failure of the wall is possible if not replaced.

Instead of notifying authorities of the potential landslide hazard and assuming responsibility for the flawed retaining walls, Steve Shiver President of Ghost Town Partners and his co-investors, filed for bankruptcy protection.

Bankruptcy rules require petitioners to maintain insurance protection during reorganiztion. First Mercury Insurance, underwriter for Ghost's Town's liability policy, cancelled coverage on January 28, 2010 for the company's failure to pay premiums. The policy was reinstated shortly after the Ghost Town landslide. First Mercury has declined claims for losses incurred during the lapse period. For a list of Ghost Town creditors please see Bankruptcy Case No: 09-10271.

On May 19, 2010 federally-funded contract engineers advised Maggie Valley officials and residents that the Ghost Town in the Sky site contains up to 16,000 tons of remaining unstable material. The Ghost Town in the Sky hazard is classified as an “impending or active slope failure.”

When funds are received, engineers plan on returning the mountain slope to its natural state by removing developer’s loose fill. Due to unstable conditions heavy equipment will not be allowed on the worksite. Some of the soil removal will be undertaken with shovels and wheelbarrows.

Most of the $1.4 million Ghost Town in the Sky landslide-mitigation project is being underwritten by a federal grant. Additional monies will come from the North Carolina Department of Transportation. The town of Maggie Valley and Ghost Town owners have offered contributions of $25,000 each.

Where are the Criminal Indictments?

Centex, now part of Pulte Group, Inc., is currently the largest U. S. homebuilder and is doing business in North Carolina. It is not well-known but Centex has a history of building subdivisions on hazardous-land tracts.

Ghost Town Partners, LLC is a North Carolina entity that was formed to own and operate an amusement park.

Evidence supplied by the media and other parties suggest that Centex and Ghost Town principals engaged in grossly negligent behavior that resulted in reckless endangerment. Even though these landslide-prevention walls are located in different states and were erected by separate business entities the corporate mindset was identical: build without permit and mandatory inspection.

Reckless endangerment is the failure to use reasonable care to avoid consequences that threaten or harm the safety of the public and that are the foreseeable outcome of acting in a particular manner.

The decision to prosecute Centex and Ghost Town in the Sky officials for grossly negligent behavior rests with state and federal law enforcement. Considering the facts, it is thought-provoking that no government agency has opened criminal investigations into the cause of these emergencies.






















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So the question is why two states’ attorney generals have not opened investigations as to the cause of The Hills of Rivermist and Ghost Town in the Sky landslide disasters?

Confidential Ghost Town in the Sky Engineering Report

Photos of Ghost Town in the Sky landslide damage—Asheville Citizen-Times
Flyover video provided by WSPA News

Ghost Town in the Sky Landslide Disaster February 5, 2010
Maggie Valley, North Carolina

The following is a reprint of a no-longer available Mountaineer article concerning the cause of the Ghost Town in the Sky landslide disaster. The Ghost Town in the Sky hazard site is currently classified as an “impending or active slope failure.”

'Could have been twice as bad'

The Mountaineer
Beth Pleming
Wednesday, 10 February 2010

Engineer says measures at Ghost Town mitigated Rich Cove slide

MAGGIE VALLEY — An engineer overseeing repair work where a giant mudslide originated Friday said the disaster could have been twice as bad and perhaps fatal had owners of the mountaintop amusement park not been proactive in trying to correct a problem.

Meanwhile, Rich Cove Road residents are still unable to return home both because the road is blocked and because more wet weather has authorities nervous about the prospect of a second slide.

An additional 12,000 to 16,000 tons of material— at least twice the amount that flowed down from the top of the mountain Friday night—is hanging loosely behind a retaining wall at one edge of Ghost Town in the Sky park property. Officials fear that the right amount of precipitation could break the material loose.

Rick Wooten, a geologist with the N.C. Department of Environment and Natural Resources, said recent snowfall, followed by heavy rains on Feb. 5, triggered the slide that originated at the retaining wall. However, an investigation continues on what caused the slide and what role the retaining wall played in the disaster.

Issues surrounding the wall have been a slippery slope for quite some time, said engineer Pat Burgin, who was hired by Ghost Town to inspect the wall in 2008 when problems first became apparent. Amusement park officials had been working to stabilize the area before bad weather hit.

Had Ghost Town officials not already removed a substantial amount of material from the slide site, Friday’s disaster would have been much worse and likely fatal, said Burgin.

“Present (park) owners kind of inherited a problem from the previous group of investors,” Burgin said.

Shortly after Ghost Town Partners, LLC purchased the park in 2006, Caroline-A-Contracting of Maggie Valley was hired to build a retaining wall. Construction was complete in 2008. The company was paid more than $600,000 for the job, leaving an outstanding balance of more than $28,000 owed to the contractor.

“That was the wall that began to fail shortly after the contractor finished it,” Burgin said.

Through their attorney, Russell McLean, Caroline-A-Contracting filed a lien against Ghost Town in the amount of monies owed. Park officials contested the balance with a counterclaim, filed May 20, 2009, alleging breach of contract based on allegations the wall was improperly constructed. At that time, the case was essentially put on hold until bankruptcy matters could be resolved.

“I looked at it and determined it was not done properly and was an unsafe situation,” said Burgin. “The contractor who built it didn’t build it right. It was a bad job.”

Burton Edwards, owner of Caroline-A-Contracting, disagrees.

“Mr. Burgin is wrong,” he said. “The professional engineer on the project was my uncle Verlin (Edwards), and he is an excellent engineer. (The wall) was designed properly and built properly because he was there everyday when it was put in.”

When the wall was constructed, the county’s slope ordinance had not been adopted, but would not have applied anyway since the area falls under the jurisdiction of Maggie Valley where there is no slope ordinance. The town relies on the N.C. Department of Environment and Natural Resources to handle permit issues.

If a land-disturbing activity exceeds 1 acre, a plan must be prepared to obtain a permit.

“I don’t recall a state permit on that and don’t know how much disturbance there was,” said Janet Boyer, regional engineer for the department’s land quality section. “If it was under an acre, there wouldn’t have been a plan required. Occasionally people have work done over an acre and people don’t get an approved plan or notify us. I may be talking to them in the future about plan to fix it and the cleanup.”

The contractors’ design choice was not the most suitable type for that location, Burgin said of the mechanically stabilized earth (MSE) wall.

“It is the opinion of the engineer, based on site observations, experience with local soil properties and MSE structure design, the primary cause of the MSE wall movements are due to improper construction of the wall,” states Burgin’s initial report. “The soil reinforcement component of the design may be inadequate and/or improperly installed. In addition, the design of the wall may be incorrect for the specific site. The MSE wall is not functioning as intended at this time and structural failure of the wall is possible if not replaced.”

When park officials noticed asphalt cracks around the wall, the contractor was the first person called, said Burgin.

“(The contractor) denied doing anything wrong, and blamed the problem back on Ghost Town,” Burgin said.

Edwards claims there are sewer and water line issues near the wall that are “beyond our control.”

“There’s a lot of things we want to know, too,” said Edwards. “Everybody needs to do their research before they go pointing fingers.”

When problems surfaced Ghost Town officials began removing the wall and taking steps to make the area safer.

Burgin visited this site about six months ago and said nearly one-third of the material had been removed by another contractor hired by Ghost Town.

Luckily, contractors had cleared a flat area below the wall to act as a safety net.

“They were basically doing everything they could do to prevent a hazard,” he continued. “If not, (the Friday slide) would have taken out houses instead of washing up behind them, and there would have been at least twice as much material come down that mountain, if not more. They were very proactive in trying to stop this thing in its tracks. Then came the rain. The wall gave way, and when it did the safety area caught a considerable amount of the material, probably half of it. The rest of it washed down the road.”

Geologists measured the slide and said it was about 3,000 feet long, 80- to 90-feet wide and reached up to 175-feet wide in some places. Fortunately, there were no houses in the direct path. The flow of mud took out the backside of one home and caused minor damage to three others, in addition to causing road damage.

“The slide did more damage to (Ghost Town) property, to their road, than anywhere else,” said Burgin. “It totally washed out their road.”

In several other places, mud and debris blocks road access, but does not appear to have washed out the road. Rich Cove Road is the steepest state maintained road in North Carolina and it the responsibility of the state transportation department to repair and maintain.

DOT officials did not return messages by press time, and no timeline for clean up of the road has been offered.

The American Red Cross of Haywood County is assisting with victims’ needs in the meantime, in collaboration with other nonprofits, including the Salvation Army. Donations from private individuals, including Ghost Town in the Sky and $1,500 collected as part of Jonathan Valley Elementary School’s penny war has also been contributed to the cause.

Maggie town leaders and county commissioners declared the site a disaster area, which is the first step toward seeking federal relief funds. Representatives of the Federal Emergency Management Agency were scheduled to visit the site Monday, but postponed the visit until today.

With regard to the park’s upcoming season, slated for a May opening, park CEO Steve Shiver called the “latest monkey wrench just one more in a long history of challenges for Ghost Town.”

“We were moving quickly to reopen for the 2010 season,” he said. “This is very unsettling and uncomfortable for us, and Maggie Valley as a whole is obviously going to be affected for this season. Historically we’ve been opening May 15, there’s no way we can open in May now. Pushing back our opening date will mean fewer overall visitors in the valley throughout the duration of the season.”

While awaiting results of a bankruptcy proceeding, the park continues to pursue funding options, but is now also at the mercy of DOT who must clear the road before park officials can proceed with clean up and repair work on Ghost Town property.

“They are literally caught between a rock and a hard place, no pun intended,” said Burgin.

As for the park’s plan of attack to repair the slide site, “It’s not rocket science,” said Burgin. “They will continue trying to remove the wall. …But, they’ve got to have money. It costs a lot of money to move dirt, but when you move dirt it turns to gold. It would sure be nice to have some assistance.”

Meanwhile, with much of the future still up in the air, Shiver said he’s counting his blessings.

“We’re very thankful that no one was hurt, and Ghost Town has made a donation for the specific relief of those who were affected,” he said.