Natural Hazard Disclosure Reports – What You Should Know

Natural Hazard Disclosure Reports – What You Should Know

What is a Natural Hazard Disclosure Report?

Is the property you want to buy located within a natural hazard zone? California law requires real estate agents and sellers to provide home buyers with a “natural hazard disclosure statement” form. To complete the form agents or sellers purchase a natural hazard disclosure report. It determines if a property is within a designated hazard area. These areas may include hazards such as an earthquake fault, a seismic hazard zone, seasonal flooding, or wildfires.

Although California law mandates natural hazard disclosure reports, agents also can purchase similar reports for properties in other states. So even if a natural hazard disclosure report isn’t required, it can be a valuable assessment tool. For a typically nominal fee, they can provide beneficial information to potential clients. For example, NHD reports can cover a property’s tax liability as well as potential natural hazards.

What Does a Natural Hazard Disclosure Report Cover?

California law requires disclosure when properties for sale lie within any of these six state or local hazardous areas:

  1.  A Special Flood Hazard Area
  2.  An Area of Potential Flooding (dam failure inundation)
  3.  A Very High Fire Hazard Severity Zone
  4.  A Wildland Area That May Contain Substantial Forest Fire Risks And Hazards
  5.  An Earthquake Fault Zone
  6.  A Seismic Hazard Zone

NHD reporting providers, like First American Natural Hazard Disclosures, also can include these important disclosures or property hazards in reports:

  • Airport influence areas (Property that is close enough to an airport to experience booming noises, structures shaking, pollution, fuel odors, etc.)
  • Commercial and industrial usage (Property that is close to companies or industries. These may previously or currently manufacture products potentially hazardous to health, water, land, etc.)
  • Environmental contamination sites (Property that is close to, or situated on, a former military installation, landfill area, brownfield, etc.)
  • Megan’s Law disclosures
  • Toxic mold sites
  • Radon gas exposure

Supplements to National Hazard Disclosure Reports in California

In addition to California-mandated disclosures, First American NHD can also include the following in its natural hazard disclosure reports:

California law requires that buyers receive an NHD statement at the time of home inspection. Buyers then have three days to review from the date they receive the statement (think “buyer’s remorse”). They can withdraw an offer if a natural hazard disclosure report causes them to decide against a purchase. If buyers accept the report, all associated parties must sign the NHD statement before the transaction can legally close.

Your real estate agent should be able to help with additional questions.

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