BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
SB 110 (Rubio)
As Amended May 2, 2011
Hearing Date: May 10, 2011
Fiscal: No
Urgency: No
BCP
SUBJECT
Real Property Disclosures: Mining Operations
DESCRIPTION
This bill would require expert reports used to fulfill natural
hazard disclosure requirements in residential property sales to
include a "Notice of Mining Operations" if the property is
within 1,000 feet of specified mining operations.
BACKGROUND
In 1998, the Legislature enacted AB 1195 (Torlakson), Chapter
65, Statutes of 1998, to require sellers and their agents to
issue a Natural Hazard Disclosure Statement to buyers in real
property transactions. The statement requires the seller or
agent to indicate whether a property is within specified natural
hazard zones, such as high fire hazard severity zones and
earthquake fault zones. The seller may make the disclosure
statement personally or by using a third-party expert report.
When using an expert to satisfy the disclosure requirement,
existing law requires the expert to disclose whether the
property is within an airport influence area, the jurisdiction
of the San Francisco Bay Conservation and Development
Commission, or one mile of specified farm properties.
This bill, sponsored by the California Construction and
Industrial Materials Association (CalCIMA), would additionally
require the expert to disclose whether the property is within
1,000 feet of real property subject to mine operations
identified in a Notice of Reclamation Plan Approval. Similar to
an airport or farming operation, those mining operations
(more)
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arguably impact the surrounding property and prospective
homeowners should be aware of the potential impact on the
property from those operations.
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. (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.)
Existing law requires a seller, or the seller's agent in certain
cases, to disclose to a buyer when a property is in a specified
natural hazard zone. (Civ. Code Sec. 1103.2.) Such disclosures
are necessary: (1) if the seller or agent has actual knowledge;
(2) in some cases, if the local jurisdiction has compiled a
list, by parcel, of properties within the zone; or (3) in other
cases, if the local jurisdiction has posted a map that includes
the property. (Civ. Code Sec. 1103.)
Existing law permits a seller to use an expert report or opinion
from an engineer, land surveyor, geologist, or expert in natural
hazard discovery to fulfill his or her natural hazard
notification requirements. (Civ. Code Sec. 1103.4.)
This bill would require an expert who produces a natural hazard
disclosure report to determine whether the property is located
within 1,000 feet of a parcel of real property subject to mine
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operations identified in a Notice of Reclamation Plan Approval,
as specified. If the residential property is within 1,000 feet,
the report shall contain the following notice:
NOTICE OF MINING OPERATIONS
This property is located within 1000 feet of a mine
operation that has been identified in a Notice of
Reclamation Plan Approval recorded with the county recorder
pursuant to Section 2772.7 of the Public Resources Code.
Accordingly, the property may be subject to inconveniences
resulting from mining operations. You may wish to consider
the impacts of these practices before you complete your
transaction.
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COMMENT
1. Stated need for the bill
According to the author:
Historically, aggregate operations were located in areas where
they had few neighbors. However, urbanization has resulted in
the encroachment of existing operations by other land uses.
SB 110 would ensure people who move adjacent to mine
facilities are aware of their existence and activities,
reducing misunderstandings by:
Ensuring that new property purchasers are informed
of an adjacent industrial use prior to purchasing
property.
Ensuring that property owners are aware of the
location of information on reclamation plans governing
the end use configuration of adjacent mining property is
located.
Enhancing knowledge of adjacent industrial uses and
approved reclamationÝ,] SB 110 would help reduce
misunderstandings between preexisting vital industries
and new property owners.
2. Proposed disclosure aimed at informing individuals of nearby
mining operations
Under existing law, sellers and their agents are required to
disclose any fact that would have a significant or measurable
effect on the value or desirability of the property. (Karoutas,
232 Cal.App.3d 767; Reed, 145 Cal.App.3d 261.) Cities and
counties are also arguably permitted to adopt ordinances that
allow notification to a prospective homeowner that the dwelling
is in close proximity to mining activity. (Civ. Code Sec.
1102.6a.) This bill would augment those disclosures by
requiring expert reports used to fulfill the natural hazard
disclosure requirements to include a "Notice of Mining
Operations" if the property is within 1,000 feet of a mine
operation identified in a Notice of Reclamation Plan Approval
recorded with the county recorder.
As background, surface mining operations are prohibited unless a
reclamation plan has been filed, and approved, by the lead
agency. Upon approval, the "Notice of Reclamation Plan
Approval" must be filed with the county recorder and state:
"Mining operations conducted on the hereinafter described real
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property are subject to a reclamation plan approved by the ____
(lead agency), a copy of which is on file with the ____." (Pub.
Res. Code Sec. 2272.7(a).) As a result, this bill would
arguably require the expert hired to fulfill the disclosure
requirements to examine the public record to see if there is, in
fact, a mining operation within 1,000 feet of the subject
property.
Considering that 1,000 feet is relatively close to what could be
a significant mining operation, the proposed notice would appear
to appropriately put the prospective purchaser on notice of the
nearby activity. If that activity does, in fact, have a
significant or measurable effect on the property, the seller
would arguably already have to disclose the nearby mining
activity. (See Karoutas, 232 Cal.App.3d 767; Reed, 145
Cal.App.3d 261.)
3. Distance
To trigger the requirement for the expert to disclose, the
mining operation must be within 1,000 feet of the property
at-issue. That distance is important because it must balance
the importance of notifying prospective homeowners of the
potential disruptive effects of the mine and, also, not be so
broad as to artificially deflate the value of properties that
are not affected by the mining activity. Although the distance
is substantially less than the one-mile radius for notification
of nearby farms, it is unclear whether the byproducts of mining
activity would, in fact, travel as far as those from certain
farming operations. On the other hand, certain effects of
mining, such as trucks carrying gravel along roads may stretch
far beyond the 1,000 foot radius.
As noted above, from a policy standpoint it is important to have
as narrow a radius as possible so as not to create a bright-line
rule that requires homeowners to notify prospective purchasers
of mining operations that do not actually impact the property.
4. Interaction with nuisance
While the introduced version of this bill would have provided
mining operations with broad protection from nuisance lawsuits,
the present version of the bill seeks to address that issue by
requiring the above disclosure when the NHDS is performed by an
expert. That disclosure could put the prospective owner on
notice of the potential impact of the mining activity, and thus,
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potentially reduce the likelihood that the owner will be caught
by surprise by the activities of the mining operation. If the
homeowner subsequently sought to bring a nuisance action against
the mine, that notice might be enough to show that the homeowner
knew of the potential nuisance and nevertheless elected to move
near the mine. Despite that potential impact, the notice would
appear to serve the policy goal of warning individuals prior to
moving - that notice may allow a prospective purchaser to make
an educated decision about whether he or she is willing to
endure the nuisance in exchange for the price of the property.
Support : None Known
Opposition : None Known
HISTORY
Source : California Construction and Industrial Materials
Association
Related Pending Legislation : None Known
Prior Legislation : See Background.
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