Nestled at the mouth of American Fork Canyon on a mountain bench, Cedar Hills is one of the fastest growing Utah communities. The demand for plots with scenic views has led to significant construction along the foothills. In 2000 a geologic study of the land designated for the Cedar East Townhomes subdivision found it unsafe to build there. Another study done in 2002 contradicted that report which highlights the inherent scientific uncertainty and, at times, guesswork that is involved in hazardous land use decisions. Nevertheless, the city gave developers permission to build. Having no legal obligation to do so, the developers failed to notify the buyers of potential risks due to geologic hazards making the inhabitants unaware of the potential serious consequences of their purchase.

On April 28, 2004, a portion of a hillside above Cedar East Townhomes began slowly moving down the hillside and into a fourplex. The ensuing damage absorbed by the complex forced the evacuation of its inhabitants and eventually necessitated the destruction of the townhouses. The homeowners were reimbursed for their mortgages, closing costs and temporary housing by the developers. While the developers made admirable recompense to the homeowners, might the homeowners be better served if the risks were disclosed to them before they purchased? This article posits that mandatory disclosure laws benefit all parties in real estate transactions - the seller, buyer and the municipality that approves new subdivisions. A brief historical review of real estate disclosure law will be followed by a discussion of the universal benefits resulting from disclosure. The question of scientific uncertainty will also be examined in the light of disclosure laws. Finally, this article will present some specific recommendations for the Utah State Legislature in considering enacting disclosure statutes.

Background of Disclosure Law
The history of disclosure regulations of properties on geologically hazardous land is ambiguous not only in Utah, but also in much of the United States. The prevailing rule for a long time was caveat emptor, "let the buyer beware." In other words, the buyer was solely responsible for defects of purchased products. Caveat emptor assumed the equal ability of buyer and seller to access product information. This principle peaked in the laissez-faire, pro-business climate of the late 19th century. But since the early 20th century, courts have started to suggest that it is unreasonable for a buyer to understand all the factors at the same level of the seller.2 With some exceptions,3 courts have generally restricted caveat emptor. One law professor summarized the prevalent jurisprudence: "We should not realistically expect a purchaser to check the county clerk's office, the planning and zoning commission files, the Army Corps of Engineers, the United States Geologic Society, the state geologist, other agencies, and the internet..."4

State legislatures around the country have been even clearer than the courts. About half of U.S. states currently require disclosure laws of defects known to the seller of the home or with the land on which the home is built.5 This trend started with California in 1985. In Utah, however, a dearth of superior judicial precedent or statutes has led to confusion about hazardous land disclosure.

This lack of widespread, enforceable rules is a mistake. Failure to notify buyers of geologic hazards in an area may distort the market price. While it is true that the Utah Geologic Survey publishes a map of geologically hazardous areas, this map is rarely consulted in buying decisions. Further, the basic economic concept of cost internalization hurts the buyer as well. This concept holds that if costs aren't internalized, in this case if the buyer isn't aware of additional costs associated with the property built on hazardous land, more houses will be built than is reasonably safe. From the developer's perspective, it will be profitable to build more houses if buyers aren't aware of risks.

Competing Groups
There are three different and often competing groups that have an interest in development: homeowners, municipalities, and vendors. For the purposes of this article, vendors include developers, contractors and real estate agencies.

Even though many consumer goods carry disclosures, vendors of the most expensive consumer good a buyer will ever purchase - a home - have little legal requirement to notify buyers of potential problems. The benefits of notification requirements to homeowners are obvious. They will simply have more information specific to their home site to guide them in buying decisions. One regional planner pointed out that information on site-specific hazards is publicly available.6 However, few potential homebuyers are aware of the full range of information available to them and fewer still consult it. While not consulting information is certainly an unwise practice, as the professor noted above, the amount of information that needs consulting on every aspect of a home purchase may be daunting to all but the most meticulous purchaser. This information could be summarized and centralized onto a few disclosure notification forms so purchasers can both receive and understand all the relevant information of their purchase.

There are also clear benefits for municipalities. To understand the benefits of disclosure for municipalities it is necessary to review the process by which cities plan for and approve new developments. Municipalities manage growth within city limits. State law requires long-term general plans wherein the city projects how it will accommodate growth in the future. In reality, however, the pressures of growth make municipalities generally deferential to the wishes of developers rather than abiding to the requirements of the municipal plan. One Utah County official offered a critique of why city officials afforded what he believes is too much deference to developers: "Look at who's on the city councils - they're mostly packed with developers. Cities don't look to the future, but proceed case by case. They rarely follow their own general plans; they're more like suggestions than plans."7 The regional planner offered a different justification: "Cities have to adjust their plans as they need to, especially when something better comes along." He then smiled and said, "But it's not always a bad idea to follow them."

In addition to planning, cities also approve new developments. The problem for cities in approving developments on hazardous land is it creates a tension between two government responsibilities - ensuring public safety and managing growth.

According to the Municipal Land Use Development and Management Act, municipalities are required to do several things in approving a new development,8 but none of the provisions specify how to deal with hazardous land. Thus, hazardous land is subject to the same practices as other land. Cities require vendors to survey, examine existing easements and right-of-ways, and ensure there are no outstanding taxes on the land. The city planning commission then grants a hearing on the proposed development and notifies the public at least 14 days before such hearing. Developers may submit an engineering or environmental impact report as part of their proposal, but the burden of proof is placed on the city to show that the development is unsafe. Cities rarely have the resources or the will to examine in depth the safety of a proposed subdivision and are most often deferential to development proposals.9 Deference toward the developer is even built into the law. The statute specifies the city "shall" approve the development if the vendor meets the criteria.10

The above discussion shows that cities are under no legal requirement to notify its citizens when developments are built on hazardous land. The city is not in legal jeopardy because the Governmental Immunity Act of Utah11 grants immunity to governments from prosecution for official acts. However, municipalities would still benefit from notification rules because it resolves the tension between ensuring public safety and managing growth. Cities could better fulfill their role in ensuring public safety by informing their citizens of potential hazards. Citizens can make informed decisions instead of relying solely on the good graces of vendors.

Requiring the developer to notify would also necessitate more in-depth engineering and impact reports. The Cedar Hills development used a study that contradicted an earlier report that showed the townhouse site was unsafe. Notification requirements would require a higher burden of proof of the developer, which is reasonable when one considers that whoever wants to take action should first demonstrate the consequences of the action. The cities can therefore satisfy public safety by making citizens aware of risks and also make developers more responsible for good development practices within city limits.

The preceding discussion may seem as if the onus of improved development practices falls squarely on vendors. However, the lack of a clear statute also hurts vendors. Surely vendors will experience increased costs in the short term, but notification requirements make sense for vendors in the long term. Disclosure provides a legal shield for vendors if property damage results from a geologic event. Vendors across the country have been successfully sued because of property damage resulting from homes built on hazardous land.12 All a citizen must do is prove that the vendor was negligent in putting the home on a site at an increased risk of natural disaster.13 An attorney who frequently represents developers in land use law cited another reason for why notification requirements are reasonable.14 He said in his experience 90% of developers worked according to ethical standards. But a small minority cut corners and a few are even unscrupulous. All vendors would be held to a higher ethical standard with mandatory disclosure statutes.

Vendors have recognized their vulnerability to liability suits. The National Association of Realtors has estimated that about three quarters of the lawsuits filed against real estate agents and sellers result from lack of disclosure about property conditions.15 Perhaps ironically, realtor associations have often been the prime movers in legislatures to get disclosure laws passed because they know of the shield such statutes afford them.16 Notification requirements would provide needed liability protection to vendors. Higher ethical standards and greater legal protection improves the reputation and the practice of the profession.

Scientific Uncertainty
Beyond being beneficial to the parties in question, the degree of scientific uncertainty involving hazardous land use decisions also makes notification requirements smart policy. Scientific uncertainty makes any prescription based on environmental hazard problematic. Even though the Utah Geological Survey produces maps detailing the location and degree of geologic hazards in Utah County, these maps are inconclusive at best. Even the regional planner whose office was instrumental in formulating the state's hazard maps criticized their accuracy:17 "The Federal Government requires the state to create hazard maps to get disaster money. We had a lot of bad data, but the state told us to use it anyway because it's the best we had." The planner questioned whether it is even possible to strive for accuracy when measuring potential hazards because of the inherent uncertainty involved in predicting future events. The result, according to the planner, "is that we don't really know anything because we're not confident in the data." When city planners are put between such a degree of scientific uncertainty on one side and the pressure of demographic growth on the other side, growth invariably wins.

Should governments defer a public safety risk, no matter how slight, in the name of growth? On the other hand, should progress be held captive to potential unknown and probably rare natural disasters? David Church, general counsel for the Utah League of Cities and Towns, presented this opposing view of the impracticality of halting development due to possible risks. "If it were up to the Utah Geological Survey, there would be no building going on along the benches."18

There must be some balance reached that mediates between the need for public safety and the need for development. In other areas of environmental law this balance is often struck by providing for notification. Notification is especially good practice in areas with a high degree of scientific uncertainty because the consequences to public safety of a false-positive (building a subdivision on hazardous land) are much greater than the consequences of a false-negative (no action taken at all). Thus, notification makes sense in light of scientific uncertainty.

Recommendation
A compulsory notification scheme would have to be handled delicately. In addition to being burdensome to the vendor, an over zealousness to define and label every possible geologic hazard would lead to a depreciation of the value of the disclosed knowledge. A buyer could very well experience information saturation if all possible information were disclosed. An optimal level of mandatory disclosure should be sought: One that balances between the value of information simplicity and the safety concerns the buyer should be informed of. Professor Binder of Chapman University Law School surveyed the major provisions of disclosure laws in other states and summarized five key ingredients to a disclosure statute.19 This recommendation adapts and rewords some of her recommendations in the hopes of being as specific as possible while still providing discretionary latitude to legislators:

1. An inventory stated in general terms of all possible risks associated with the site. (Flood danger from a nearby waterway, mudslide danger from a hillside, etc.)

2. A brief review of the historical occurrences of geologic events and the severity of the impact.

3. An estimate in non-quantified terms of the chance of the risk becoming reality. (High, serious, moderate, low, slight, negligible. Quantifying the risk, as Professor Binder recommends, is perhaps too unreliable or arbitrary when analyzing such a degree of scientific uncertainty).

4. A listing of all relevant contact information for the purchaser if they want to know more. (This would include geologic agencies, FEMA, engineering firms, city officials, soils specialists, etc.). This last recommendation was not included in Professor Binder's list.

Professor Binder also recommends a statement of the potential consequences involved in a geologic event. Again, this may result in an arbitrary and unsubstantiated projection.

At first, the gathering of this information might seem burdensome to the vendor. However, the Utah Geologic Survey and private firms the builder would hire would provide all of this data, so it would simply be a matter of looking it up or making the information available for the purchaser in the contract. The only expense on the part of the vendor would be the possible decrease in price for the property because of this new knowledge.

As one of the fastest growing states, the issue of geologically hazardous land will be more relevant for Utah in the years to come. Incidences like Cedar Hills will become more common as houses are built closer to the mountains. The prospect of Utah vendors and purchasers clashing in costly legal battles can be obviated with common sense and mutually beneficial disclosure statutes.

1. Utah Office of Planning and Budget, 2005.

2. Cf. Wooddy v. Benton Water Co., 102 P. 1054, 1056 (Wash. 1909); Osborne v. Howard, 242 S.W. 852 (Ky. 1922); Rothstein v. Janss Investment Co., 113 P.2d 465, 467 (Cal. Ct. App. 1941); Chandler v. Madsen, 642 P.2d 1028, 1031 (Mont. 1982); Johnson v. Davis, 480 So. 2d 625 (Fla. 1985).

3. See Schubert v. Neyer (1959, App) 12 Ohio Ops 2d 231, 90 Ohio L Abs 437, 165 NE2d 226, supra ¤ 4 [b] (no vendor liability for damage incurred during mudslide). Also see ABC Builders, INC. v. Phillips (1981, Wyo) 632 P2d 925, supra¤¤ 3 [b] and 4[b] ( no vendor liability for landslide damage to the house)

4. Binder, Denis "The Duty to Disclose Geologic Hazards in Real Estate Transactions." Chapman Law Review at 13 (Spring 1998).

5. Peterson, Megan. 2002. "Seller Beware: Mandatory Disclosure Provisions in Iowa Put Sellers of Residential Real Estate on Alert." Drake Law Review 50, 569.

6. The individual interviewed did not wish his comments to be on the record.

7. This individual did not want his words for attribution.

8. Utah Municipal Code, Title 10 Chapter 9.

9. Church, David. Personal Interview, November 10, 2005.

10. The Municipal Land Use Development and Management Act, 10-9-804(d).

11. Utah Code, Title 63 Chapter 30d.

12. For a discussion of this see note iv, pgs. 26-30.

13. Cahoon, Bradley. Personal Interview. November 14, 2005.

14. This individual did not want his words for attribution.

15. See note v, pgs. 578-9.

16. Id.

17. See note viii.

18. See note xii.

19. See note iv, pg. 42.