Facts

Guarantee Appraisal Corporation (GAC) is a provider of natural hazard disclosure statements. A natural hazard disclosure statement informs a potential buyer of property of all known natural hazard risks. California requires the disclosure statement to be provided to a potential buyer of residential property by the seller of that property. GAC marketed and sold two different brands of natural hazard disclosure statements: Certified NHD and HomeServices NHD. The HomeServices brand was marketed in Southern California to affiliated businesses as the low-cost option, while the Certified brand was exclusively marketed in the Central Valley. Ventura County's Consumer and Environmental Protection Unit, and the Los Angeles and San Diego County District Attorney's Offices filed suit against GAC and launched an investigation into GAC's business marketing practices.

PLAINTIFFS' CONTENTIONS: Plaintiffs contended that defendant's disclosure reports under two different brands had different prices with essentially the same information. Plaintiffs further contended that defendant failed to disclose that the cheaper report was also available for purchase in many higher priced real estate locations. Plaintiff also contended that the Certified brand was a viable lower cost option by $16 for the identical product.

DEFENDANT'S CONTENTIONS: Defendant denied all contentions.

Result

The case settled. Defendant is required to pay $415,000 in civil penalties, costs and restitution. Defendant is required to institute changes in its business marketing practices in the future to ensure a similar incident does not occur.

Other Information

GAC cooperated in the resolution of this case.