BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 1511 (Bradford)
As Amended May 14, 2012
Hearing Date: June 19, 2012
Fiscal: No
Urgency: No
BCP:rm
SUBJECT
Real Property: Transmission Pipelines Disclosures
DESCRIPTION
This bill would require real estate sale contracts to include a
specified notice informing purchasers of residential property
about the existence of a database where information regarding
gas and hazardous liquid transmission pipelines can be obtained.
BACKGROUND
Although flexible in timeframe, the process of purchasing real
property generally proceeds through a set number of steps. The
process begins with the making of an offer by the prospective
buyer, the seller can accept that offer, make a counter offer,
or reject that offer. Acceptance of an offer or counter offer
generally occurs by the parties executing a purchase agreement,
containing the accepted offer, or counteroffer, financing terms,
and other conditions. That agreement may also specify the
duration of escrow, upon the close of which, the purchase price
is to be paid and title is to be transferred.
In order to provide purchasers of real property with adequate
information about the property, existing law requires the
delivery of various disclosures to the buyer prior to the
transfer of title. Those disclosures include details of any
known defects in the property, potential environmental hazards,
encroachments, zoning violations, nuisances, lawsuits, any
flood, fire, or earthquake risk, and in a common interest
development, various disclosures made by the homeowner's
association.
(more)
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To provide prospective purchasers with another way to find
information about the area surrounding the property in question,
this bill would require every contract for the sale of real
property to contain a specific notice regarding gas and
hazardous liquid transmission pipelines.
CHANGES TO EXISTING LAW
Existing law requires a real property seller, or the seller's
agent, to disclose to buyers any material facts that would have
a significant and measurable effect on the value or desirability
of the property (if the buyer does not know, and would not
reasonably discover, those facts). (Karoutas v. Homefed Bank
(1991) 232 Cal.App.3d 767; Reed v. King (1983) 145 Cal.App.3d
261.)
Existing law requires a seller's real estate broker to conduct a
reasonably competent and diligent visual inspection of a
property offered for sale, and to disclose to potential buyers
any facts revealed that would materially affect the value or
desirability of the property. (Civ. Code Sec. 2079.)
Existing law requires a seller of real property to make the
following disclosures, among others, if the seller has actual
knowledge of the information disclosed:
environmentally hazardous substances, materials, or products
are on the property; and (Civ. Code Sec. 1102.6)
the property is either adjacent to an industrial use or
affected by a nuisance created by such a use (Civ. Code Sec.
1102.17).
This bill would require every contract of sale of residential
real property entered into on or after July 1, 2013 to contain
the following notice in not less than 8-point type:
NOTICE REGARDING GAS AND HAZARDOUS LIQUID TRANSMISSION
PIPELINES
This notice is being provided simply to inform you that
information about the general location of gas and hazardous
liquid transmission pipelines is available to the public via
the National Pipeline Mapping System (NPMS) Internet Web
site maintained by the United States Department of
Transportation at http://www.npms.phmsa.dot.gov/. To seek
further information about possible transmission pipelines
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near the property, you may contact your local gas utility or
other pipeline operators in the area. Contact information
for pipeline operators is searchable by ZIP Code and county
on the NPMS Internet Web site.
This bill would provide that, upon delivery of the above notice,
the seller or broker is not required to provide information in
addition to the notice regarding gas and hazardous transmission
pipelines, as specified. The information in the notice would be
deemed adequate to inform the transferee about the existence of
a statewide database of transmission pipelines.
This bill would provide that nothing in the section added by
this bill shall alter any existing duty under any other statute
or decisional law imposed upon the seller or broker, as
specified.
COMMENT
1. Stated need for the bill
According to the author:
The bill seeks to remedy the problem that homeowners
impacted by the pipeline explosion in San Bruno were unaware
of any pipeline near their property. This bill will provide
a notice that prospective property buyers can obtain
pipeline locations through the National Pipeline Mapping
System Ý(NPMS)] or the local gas utility or pipeline
operator in their area. This notification is modeled after
Megan's Law related disclosure (Civil Code 2079.10a).
2. Disclosure of resource to locate transmission pipelines
This bill would require every contract for the sale of
residential property to include a statutory notice informing the
prospective purchaser that he or she can find information about
the general location of gas and hazardous liquid transmission
pipelines on the NPMS Internet Web site. That Web site allows
members of the public to select their state and county and then
view a map with gas transmission and hazardous liquid pipelines
overlaid on top of the map. The site also informs members of
the public that: "When you are zoomed in closer than a 1:24,000
scale (approximately 0.2 miles on the scale bar), you will
notice that the pipelines have disappeared from the map. In
order to see the pipelines, you must either zoom out or set the
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scale to 1:24,000 or a greater number." Thus, the site serves
the purpose of providing general (not detailed) information to
the public which arguably should be sufficient for a prospective
purchaser to determine whether the property is in the vicinity
of these pipelines. While the proposed disclosure would not
technically inform a purchaser if there was a transmission
pipeline near the property, it would provide information to that
individual that would enable him or her to make that
determination.
It should be noted that the proposed disclosure is similar in
concept to the required Megan's Law disclosure, which informs
both tenants and purchasers of property that information about
sex offenders is made available to the public via an Internet
Web site maintained by the Department of Justice.
3. Provisions do not alter any existing duty under any other
statute
This bill would state that by providing the statutory notice,
the information in that notice shall be deemed adequate to
inform the purchaser about the existence of a statewide
database. The bill also provides that nothing in the section
added by this bill alters any existing duty under any other
statute or law imposed upon the seller or broker. By not
altering those duties, this bill would arguably preserve any
duty under those sections to independently inform a purchaser of
a defect in the property (known to the seller or broker) related
to a transmission pipeline.
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4. Concern about transmission pipelines
The September 9, 2010 gas line explosion in San Bruno
highlighted the potential danger posed by a ruptured
transmission pipeline. The rupture of that line killed eight
people and destroyed 38 homes. Regarding the potential ongoing
risk posed by transmission pipelines, the San Francisco
Chronicle's June 6, 2012 article reported:
Pacific Gas and Electric Co. is conducting emergency leak
surveys on 180 segments of its natural-gas pipeline system
after acknowledging it had ignored their vulnerability to
corrosion, in some cases for years, the company said
Tuesday. . . . More than half the 180 pipe segments were
found to have corrosion vulnerabilities this year, according
to a list provided by the company's head of regulatory
compliance, Bill Gibson, in a letter to California Public
Utilities Commission. . . .
The vulnerability is a lowered level of electric current
running through the metal lines that is used to protect the
pipes from soil contact. The electric current wards off
external corrosion, which if unchecked can cause a pipeline
to rupture.
Among the pipes with corrosion vulnerability is Line 132,
the transmission line that ruptured at a flawed weld in San
Bruno on Sept. 9, 2010, killing eight people and destroying
38 homes, PG&E said. (Van Derbeken, PG&E ignored corrosion
danger on gas pipes, S.F. Chronicle (June 6, 2012) p. C-1.)
As a result, potential purchasers may likely be interested in
determining whether a home they may purchase is located near a
gas or hazardous liquid transmission pipeline.
Support : Consumer Federation of California; First American Real
Estate Disclosures
Opposition : None Known
HISTORY
Source : Author
Related Pending Legislation : None Known
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Prior Legislation : None Known
Prior Vote :
Assembly Judiciary Committee (Ayes 10, Noes 0)
Assembly Floor (Ayes 77, Noes 0)
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