ESCROW GEOLOGIC REPORTS

When purchasing a hillside property in the Southern California area, one of the essential evaluations performed is the geologic evaluation. During the escrow period, the prospective property owner will normally have a geologic contingency period for the buyer to evaluate geologic conditions at the property.  This period of time is normally 5 to 10 working days during which time the buyer can approve or disapprove of the geologic conditions at the site. The geologic conditions at the site are summarized in a written report.

Purpose

The purpose of the geologic evaluation is to educate the property buyer about geologic conditions which effect the present and future performance of the site and structures. This information is used to assess the risk involved in the purchase and is also sometimes used in financial negotiations with the seller. Potential geologic hazards which go unrecognized can manifest at any time, causing potential financial losses, and legal liability. Geologic problems at the site can also cause difficulties at the time of resale.

Scope of Work

The scope of work conducted during the preparation of a geologic escrow evaluation has changed considerably over time.  Initial reports prepared in the 1960's and 1970's contained no more that a general overview of local geology.  As the field of engineering geology developed, escrow geology evaluation reports became more involved, including more aspects that can effect the long term performance of hillside properties and structures.  While no official standard of care exists for preparation of escrow geology reports, certain components are now generally recognized as  part of the typical escrow geology report :

• Research of records at Building and Safety

• Physical observation of geologic conditions at the site

• Discussion of geologic hazards effecting the site and structures

• Written report 

Research of Records - The scope of work that a geologist performs during an escrow evaluation initially consists of research of records at the local Department of Building and Safety.  Every independent governmental municipality has different public document storage and accessibility policies.  Some municipalities currently have little to no document archiving or public access (Santa Monica), while others have extensive document archives (Malibu, City of Los Angeles, County of Los Angeles). Valuable information can often be found within the city records including: permits for past construction, city letters regarding past slope failures or mudflows, city "Orders to Comply" instructing the property owner to correct a condition at the site, city letters regarding past earthquake damage at the site, prior soils or geology reports prepared for the site, and legal documents warning future property owners of certain site conditions or placing restrictions on use of the property. Copies of the appropriate research material is provided with the geology report.  The availability of prior reports and documents is however not always reliable.  Public documents are often misfiled, lost or removed from storage.

Site Visit - A visit to the site is coordinated with the buyer and seller of the property.  It is not necessary to schedule the geologist at the same time as the other home inspections, however it is sometimes convenient to discuss overlapping areas of responsibility with the other professionals.  The time required to perform a physical evaluation at the site is a function of several factors, but usually lasts one to two hours.   When complex conditions are discovered or the property is large or difficult to evaluate, a greater amount of time is necessary to complete the work.  Site conditions are evaluated from a visual perspective and no destructive testing is usually performed.  Observation must be conducted both inside and outside the residence.  An interior observation of the residence is important because observation of visual signs of  distress is used to characterize the behavior of the underlying earth materials from a geologic standpoint to aid in the evaluation of adverse geologic processes, such as landsliding, creep, settlement, and reaction of expansive soils. Geologic conditions are examined on the exterior of the property.

Geologic Hazard Discussion and Written Report -  There are many potential geologic hazards which may be present within the hillside areas. Some of these potential hazards may be completely obvious to the professional, but overlooked by the layperson. During the course of our site observation, the majority of properties we visit are in need, to some degree, of improvement in drainage control, slope planting, maintenance of existing drainage control devices and occasionally seismic retrofitting. The following is a summary of some of the general areas of concern typically addressed in an escrow geology report.

Overall Site Stability - One of the most important aspects of hillside purchase is overall site stability. Instability can result from deep-seated landsliding or slow, long term lateral movement, often referred to as "downhill creep". During the course of the site observation, the property is searched for visual signs of previous and potential slope instability. Instability may show up as cracks in the ground surface, tilting of structures in a downslope direction, cracks in concrete decking or slabs, unusual topographic conditions or changes in vegetation patterns. The geologic structure of the underlying bedrock also plays a significant factor in overall site stability. Quantitative slope stability analysis is beyond the scope of typical escrow geology reports.  Quantitative analyses require the coordinated services of a licensed soils engineer, subsurface exploration, and laboratory testing of the onsite earth materials.

Mudflow Hazard - Mudflows typically occur within canyons or natural drainage courses within hillside terrain which is overlain by surficial materials, such as fill, soil, or colluvium. Mudflows are particularly destructive and occur often without any notice. Identifying areas of potential mudflow is very important from a personal safety standpoint and from a financial standpoint. Hillside areas are observed for signs of past mudflows or the potential for future flows. Recommendations can be made to mitigate the hazard through a variety of industry standard measures (debris basins, deflection walls, debris fences).

Surficial Stability - Natural hillsides are typically mantled  with a layer of residual or colluvial soil which can experience surficial failure and erosionduring periods of heavy or prolonged rainfall.  Slopes consisting of compacted fill or covered by loose fill materials can also experience surficial instability. Slopes with the potential for instability should be identified so that measures can be taken to reduce the risk of future problems and reduce the potential for damage to downslope properties.  As with overall slope stability evaluations, surficial stability is not quantitatively evaluated as part of an escrow geologic opinion report preparation. 

Creep - Descending slopes which consist of non-bedrock earth materials, such as compacted fill, uncompacted fill, soil, alluvium and weathered bedrock are susceptible to long term creep. Creep is a process which slowly causes the near surface earth materials to move downslope over time. Extensive rainfall and seismic events are known to cause an acceleration of the creep process. Structures such as decking, walls and fences located near the tops of creep-prone slopes can over time develop cracking, distress and movement downslope.

Condition of Site Structures - Distress and general discussions of conditions of the site structures described in a geologic report is provided only as a means of characterizing the geologic conditions at the site and behavior characteristics of the underlying earth materials. Evaluation of structural performance and integrity of existing site structures and foundations must be performed by a qualified civil or structural engineer. Critical site structures include the residence, swimming pool, retaining walls, decking, tennis courts, and detached garages or studios. Geologic conditions which effect structure performance may not remain the same over time. Drainage patterns change, water lines can develop leaks, soil can continue to consolidate, slopes fail and creep, and earthquakes occur. All of these factors can have adverse affects on structure performance at any time, even after many years of favorable performance.

Seismicity - Living in Southern California, the homeowner must accept the fact that we frequently experience strong earthquakes, which can result in significant damage to structures. While the homeowner can not prevent earthquakes from occurring, there are certain precautions which can be taken to minimize the risk of seismically-induced damage to the site structures and to the site itself. Information concerning potential seismic hazards can be obtained from published maps and websites, such as the Southern California Earthquake Center.  A review of the State of California published seismic hazard maps is performed to aid in the evaluation of seismic risk at the subject property. Following the 1994 Northridge Earthquake, the State of California published a set of seismic hazard maps which delineate areas which are potentially susceptible to seismically-induced slope failure and liquefaction. Review of the published maps and correlation with specific site conditions can give a meaningful evaluation of site specific risks. Review of the maps alone may not provide an accurate assessment of the specific site conditions. Steps can often be taken to reduce potential seismic damage to the site and structures. (see Seismic Evaluations).

Surface Drainage Control - Possibly the most important aspect of maintaining a hillside property is surface and subsurface drainage control. Effectively conducting site drainage to an approved location significantly reduces the risk of future geologic problems on a site. Improper drainage control can lead to slope instability, foundation settlement, damage to wood flooring and framing and promote reaction of expansive soils. Interior moisture penetration through retaining walls or caused by faulty exterior grades is also a common problem.  In most instances, identifying problem drainage conditions is fairly obvious, but at times the source of a potential problem may be elusive. Having a professional identify potential drainage problems is highly recommended.

Issues Not Normally Evaluated - Issues which are not typically addressed in an escrow geology report include: property line location, encroachment issues, easements, conformance with building codes, vegetation health, and environmental issues: mold, fungus, radon.  Moisture-related damage to wood structures, framing, etc. is also not covered in a geologic report. 

Limitations

Latent geologic defects may be present on the site which may only be discovered through subsurface exploration.  Subsurface exploration and laboratory testing of the onsite earth materials are not performed during a typical escrow site evaluation.  This is due to the cost of subsurface exploration, the time required to perform the work, and reluctance of sellers to authorize destructive testing at the site.  Should adverse geologic conditions be discovered (excessive settlement, landsliding, expansive soil damages, etc.), an expanded scope of work may be desired by the perspective home buyer.  A quantitative analysis would include the coordinated services of a licensed soils engineer, subsurface exploration and laboratory testing of the onsite earth materials.  Should conditions at the site warrant consideration of expanded scope of work, this would be discussed with the perspective buyer and real estate agents.

Other limitations are also inherent to the preparation of an escrow geology report which must be recognized by the perspective property owner. Evidence of prior distress to the site structures may be concealed by normal property maintenance which includes remodeling or renovation work, crack patching and sealing, painting, installation of floor coverings, etc. Such concealment can be intentional or unintentional. Destructive testing of crack patches and floor coverings to uncover prior repair work is not performed during the escrow geologic site observation. Concealment or prior cracks and distress can therefore significantly reduce the geologist’s ability to accurately evaluate the performance of the underlying earth materials.

Relying Upon Older Geologic Reports

A common mistake made by potential home buyers is relying upon a geologic report which was not specifically prepared for the current escrow purchase.  Geologic reports prepared for previous clients are typically non-transferrable for various reasons.  Often, the report is tailored to the specific needs and expectations expressed to the geologist at the time of the report preparation.  More importantly, geologic conditions at a site can change dramatically over time.  Geologic conditions effecting hillside properties are dynamic processes.  A common misconception is that if a property has been problem free in the past, there is little to no risk of future geologic problems.   Manifestation of geologic hazards can occur over short periods of time, typically in response to rainfall events, damaged or leaking water service lines, seismic shaking, or grading and construction performed at the site since the last report preparation.  It is also a mistake to rely upon a geologic report which was prepared specifically for construction purposes.  These reports are typically limited in scope of work and may not fully address all geologic concerns at the site. 

During the course of purchasing a hillside property, a number of different professionals are available to offer expert advice concerning their specific fields of expertise.  Choosing the right type of inspection to obtain can at times be difficult.  Your real estate agent will help to advise you on which services they feel are most appropriate for you and your property.  The following is a general list of associated professional inspection services :

Home Inspector - Nearly all hillside property purchases employ the services of a home inspector.  The home inspector will provide a general assessment of the site, structures and facilities.  Some areas briefly covered in the home inspection report are covered in more detail in the geology report. More information regarding home inspection services may be obtained from the California Real Estate Inspection Association or American Society of Home Inspectors.

Mold Inspector - Mold-related issues are becoming a more recognized potential hazard during the escrow contingency period.  Geologists and general home inspectors are not qualified for mold evaluation and usually they will waive any issues regarding mold from their scope of work. The real estate agent will usually recommend a qualified mold inspector if such services are considered appropriate.

Sewer/Drain Line Inspector - The sewer or drain line inspector will use a video camera to observe and evaluate sewer lines and drain lines for signs of obstruction and damage.

Private Sewerage System Inspector - Some areas in Los Angeles and Ventura Counties are not serviced by the city sewer system.  These areas employ privately maintained systems, usually consisting of a septic tank and seepage pits or a leach field.   Whenever these systems are being used at the site, it is highly recommended that a licensed sanitation engineer certify that the system is operational and in good working condition.

Structural Engineer - A structural engineer can be employed to perform a site inspection during the escrow period for hillside properties.  The value of a structural engineer is his ability to evaluate damage from an engineering standpoint and provide a qualified evaluation of the current state of the site structures and repair recommendations, if deemed necessary.  The structural engineer is qualified to evaluate earthquake damage to site structures, foundation performance issues and seismic bolting evaluation.

Drainage Contractor - It is possible that the home inspection report and/or geology report will provide some recommendations for improvement of surface or subsurface drainage control. Cost estimates are usually not provided in the home inspection report or geology report.  If estimating the cost of the recommended improvements is desired, hiring a drainage contractor will provide the buyer with an accurate cost estimate and description of work to be performed.

Chimney Inspector - Inspection of the residence chimneys with regards to prior seismic damage and/or conformance with current building codes requires the services of a chimney specialist.

Termite Inspector - During the escrow period, the seller is required to obtain a termite inspection of the site structures.  The termite inspection will also include an evaluation of moisture related damage to the wood structures at the site.

Environmental Engineer - Environmental issues, such as toxins, mold, hazardous materials, and radon can be evaluated by an environmental engineer.

Swimming Pool Inspector - The swimming pool inspector is employed to inspect and evaluate the components of the swimming pool system.  The pool inspector is also qualified to discuss and evaluate methods of repair concerning damage to the pool shell.  Often the pool inspector must coordinate with the geologist to determine the potential causes of the distress and methods of repair.

Surveyor - A licensed surveyor is at times employed on hillside properties to determine property boundaries, easements and encroachments.  Fences may not mark the actual property line.  Hillside properties are also known to have irregular configurations.

Choosing a Geologist

It is our opinion that there are certain qualifications which are important in determining a proper, standard of care report. As geologists, we are not in the position to tell you whether or not to purchase the site, but it is our responsibility to provide you, the home buyer, with an honest, objective opinion regarding the site geologic conditions.

Make sure your geologist is licensed. Verification is easy. Just call the State Board of Consumer Affairs in Sacramento at (916) 263-2113, or to visit their website. Consumer Affairs

Make sure that your geologist is really a geologist. There are consultants calling themselves geologists who do not have the educational requirements, experience, or licensing as geologists. We recommended that you only hire a geologist to perform a geologic inspection of your property.

Be causious of the "verbal reports". While you may save a few hundred dollars in the beginning, hiring a geologist to come to your site and only give you a verbal summary is not recommended for several  reasons. The first obvious reason is that there is no written record of what was said and if there is ever a problem at the site, it will come down to your word against theirs. Also, after some time has passed, you may not remember all the different points which were made during the site visit. The verbal report also typically does not include any city research of public documents for the property, which in our opinion is important to a proper site evaluation. The written report gives you a permanent record of the observed geologic conditions at the site on the day of the inspection. It also serves to "set the clock" with respect to description of any observed distress to later evaluate if the cracks or distress is getting any worse over time which may be an indication of an adverse active geologic process.

Make sure your geologist is going to provide you with a report which meets the generally recognized industry standard. Research of records at the Department of Building and Safety must be performed and the appropriate documents provided to the buyer, as discussed above. While research of records may not turn up all available documentation due to inconsistencies with the city filing system, important documentation is almost always found which has an impact on the evaluation of the site. If an underfloor crawlspace is present under the residence, the geologist must observe the underfloor conditions, if accessible. Certain significant geologic issues are often identified in the crawlspace area. Some geologists do not even attempt to observe the crawlspace during their site observations.

Make sure the geologist is familiar with the area where your property is located.  Familiarity with local geologic conditions and potential hazards is a valuable asset in helping to assess conditions during escrow.

Parmelee Geology Qualifications

With a strong engineeering geology background associated within the hillside construction, Parmelee Geology is well qualified to provide a thorough and meaningful evaluation of the geologic conditions pertaining to a hillside residential purchase. We have found that all too often geologic reports gloss over the important issues and are loaded with "filler" material which provides the home buyer with no useful information. Our geologic escrow observation report  endeavors to provide the buyer with the essential information in a clean, concise manner.  Every property is carefully researched at the Department of Building and Safety. Copies of appropriate permits, city correspondence and geologic and soils engineering reports are provided as an appendix to the Parmelee Geology report. We provide our clients with a geologic risk assessment of the property and suggestions on ways to improve conditions at the site and reduce risk. Informative consultation is provided at the site followed in a few days by the written report. Reports can also be faxed or e-mailed to our clients to help with the typically short escrow contingency periods. As always, we are available to answer any questions which may arise.

To contact Parmelee Geology with any questions, or to schedule an appointment, please give us a call.

Phone  (818) 889-0762          Fax  (818) 889-0766