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Introduction To NHD
The process and the documentation required in a real estate transaction differ from state to state.
When you are in a process of buying or selling a property there are many disclosure statements that you might come across during the process.
However, there is one specific disclosure report that the seller is required to provide to the buyer by law while selling a property in the state of California. This statement is known as natural hazard disclosure or NHD.
In this post, we will understand what a natural hazard disclosure report is in detail.
What Is A Natural Hazard Disclosure - NHD Report?
The Natural Hazards Disclosure Report is a statement that the state of California requires sellers to provide to buyers while selling their homes.
It is a California-specific report that property sellers must provide to their buyers to sell a home that is located in a natural hazard area.
California state law requires sellers to comply with the Natural Hazards Disclosure Act of 1998.
This report helps the buyers to know if the property that they are buying is located in any natural hazard zone such as:
- Dam breach area
- Flood risk areas
- Areas with a high risk of fire or wildfire
- Seismic Faults or Earthquake Zones
The report may also contain information about other threats that may be closer to homes, such as former military training sites, tornados, landslides, wildfires, volcanoes, hurricanes, tsunamis, and other natural disasters.
Sellers must provide buyers with their completed paperwork during the home inspection.
Once the buyer receives it, they have three days to review it and decide what to do next. If they are not comfortable with the content of the article, they have the option to cancel and walk away from the transaction.
What Other Information Could Be Included In An NHD Report?
Apart from above mentioned mandatory zones disclosures, several additional hazard zones could be included in a natural hazard disclosure report such as:
- Hurricane Risk – Report shows if the property falls under the hurricane impact zone.
- Radon gas – Report shows if the property falls under Radon gas exposure.
- Volcanic Risk – Report shows if the property falls near the volcanic eruption zone.
- Storm Risk – Report shows if the property is located near a possible storm area.
- Military Sites – Report shows if the property is within one mile of a site where the US military has tested explosive ammunition.
- Airport Influenced Area – Report shows if the property is located near an airport and if the noise from the nearby airport can cause constant disturbances.
- Mello-Roo Tax – The report shows is the property is located in a district that charges Mello-Roo Tax.
Who Pays For NHD Report?
The seller can prepare this report with the help of their real estate agent or from a third-party company. The seller has to pay for this report which could cost between $50 and $150.
Every report could be different, hence sellers choose the third-party company wisely.
Since the natural hazard disclosure report is not regulated by any government body, the details provided in the report may vary from company to company.
If the report lacks critical information, the buyer may sue the seller for damages in the future.
Most companies have fault and liability insurance to protect you if something goes wrong. But be sure to read the fine print and hold the company accountable for its mistakes.
Conclusion
Whether you’re buying or selling, natural hazard reporting can be difficult to understand. Having a qualified real estate agent who will guide you through the process can help you protect your valuable interests.
An NHD report is an important part of any real estate sale in California. The report can prevent buyers from taking more risks than they are comfortable with and help them avoid buying a property that requires high insurance premiums.
This report also protects sellers from legal suits from irate buyers who may not realize they are buying in an earthquake zone, flood zone, or part of a state where wildfires are more frequent.
