Key Takeaways
- The Natural Hazard Disclosure (NHD) is required under California Civil Code Section 1103 for 1-4 unit residential sales
- NHD covers six statutory hazard zones: flood, dam inundation, very high fire severity, wildland fire, earthquake fault, and seismic hazard
- Sellers typically use third-party NHD report companies to compile accurate hazard zone information
- Agents can rely on third-party NHD reports for protection from liability if the report is negligently prepared
- The statutory NHD does not cover all environmental hazards—additional disclosures may be required
Natural Hazard Disclosure (NHD)
The Natural Hazard Disclosure (NHD) Statement informs buyers if a property is located within specific natural hazard zones. It is required by California Civil Code Section 1103.
Six Statutory Hazard Zones
The NHD must disclose whether the property is in any of these six zones:
| Hazard Zone | Governing Agency | What It Means |
|---|---|---|
| Special Flood Hazard Area | FEMA | 1% annual chance of flooding (100-year flood) |
| Area of Potential Flooding | State OES | Dam failure inundation zone |
| Very High Fire Hazard Severity Zone | CAL FIRE (SRA) | State-designated wildfire risk areas |
| Wildland-Urban Interface Fire Area | Local Fire (LRA) | Local-designated fire hazard areas |
| Earthquake Fault Zone | CA Geological Survey | Near known active earthquake faults |
| Seismic Hazard Zone | CA Geological Survey | Liquefaction or landslide risk |
Key Terms
- SRA = State Responsibility Area (CAL FIRE jurisdiction)
- LRA = Local Responsibility Area (local fire department)
- FEMA = Federal Emergency Management Agency
How NHD Information is Obtained
Sellers and agents typically use third-party NHD report companies to determine hazard zone status:
| Method | Description |
|---|---|
| NHD Report Company | Professional service that researches all hazard zones |
| Government Maps | Official maps from FEMA, CAL FIRE, CGS |
| County Records | Local hazard zone designations |
Benefits of Third-Party Reports
- Accuracy - Professional research using current maps
- Liability protection - Transfer of liability to report company
- Convenience - All six hazard zones in one report
- Updates - Reports reflect current zone designations
Important: Agents who rely on third-party NHD reports are protected from liability if the report is negligently prepared, as long as the agent acted in good faith.
Additional Environmental Disclosures
The statutory NHD covers only six hazard zones. Additional disclosures may be required for:
| Hazard | Disclosure |
|---|---|
| Airport proximity | Airport influence area disclosure |
| Military ordnance | Former military ordnance location |
| Mining operations | Notice of mining operations |
| Industrial use | Notice of industrial zone |
| Mello-Roos | Special tax district disclosure |
NHD Delivery Requirements
Like the TDS, the NHD must be delivered as soon as practicable before transfer of title.
Timing Rules
| Delivery Method | Buyer's Rescission Period |
|---|---|
| In person | 3 days |
| By mail | 5 days |
Who Must Provide NHD
The seller is responsible for providing the NHD. However:
- The listing agent typically orders the NHD report
- Third-party companies deliver reports to all parties
- Agents assist with the disclosure process
Flood Zone Implications
If a property is in a Special Flood Hazard Area (Zone A or V):
- Flood insurance is required if there is a federally-related mortgage
- Disclosure must be made to buyer
- Flood zone determination must be obtained before closing
- Insurance cost can significantly affect affordability
Flood Zone Designations
| Zone | Meaning | Insurance Required? |
|---|---|---|
| Zone A | 100-year flood plain | Yes (federally-backed loan) |
| Zone V | Coastal flood with waves | Yes (federally-backed loan) |
| Zone X | Moderate to low risk | Usually not required |
| Zone B | Moderate risk | Usually not required |
Fire Zone Implications
Properties in Very High Fire Hazard Severity Zones face:
- Defensible space requirements (vegetation clearance)
- Building standards for fire resistance
- Insurance challenges in high-risk areas
- Disclosure to buyers of fire risk
California's Defensible Space Law
Property owners in fire hazard zones must:
- Maintain 100 feet of defensible space around structures
- Clear vegetation within Zone 1 (0-30 feet from structure)
- Reduce fuel load in Zone 2 (30-100 feet from structure)
Earthquake Zone Disclosures
Properties in Earthquake Fault Zones or Seismic Hazard Zones require disclosure of:
- Fault Zone - Within 500 feet of known active fault
- Liquefaction Zone - Soil may lose stability during shaking
- Landslide Zone - Potential for earthquake-induced landslide
Buyer's Right to Investigation
Buyers have the right to:
- Obtain professional geologic or soil reports
- Review fault zone maps
- Investigate foundation and structural concerns
How many statutory hazard zones are covered by the California Natural Hazard Disclosure?
When is flood insurance required for a property in California?