Natural Hazard Disclosure Report (NHD): What Is It And What Does It Cover?
Author:
Hanna KielarMay 19, 2023
•5-minute read
Selling a home in California? You’re required to provide buyers with a Natural Hazard Disclosure report, better known as an NHD.
Sellers must provide this report so buyers know they’re considering a home at greater risk from major natural hazards, such as wildfires, floods or earthquakes.
The goal of an NHD report is to ensure you’re informing buyers of the known risks that come with owning your home. If you disclose to buyers that your home sits in an area prone to wildfires, you shouldn’t have to worry about potential lawsuits if a blaze destroys the house after finalizing the sale.
What Is The Natural Hazard Disclosure Report?
A natural hazard zone is an area where homes face a greater risk of damage or destruction from natural disasters, such as earthquakes, floods, landslides and wildfires.
The Natural Hazard Disclosure Report is a document buyers will encounter when they buy a house in California. Under California’s 1988 Natural Hazard Disclosure Act, home sellers must provide this report to inform buyers of potential risks.
The report discloses if a home is:
- In an area prone to floods.
- Sitting on an earthquake fault line.
- In an area likely to be hit with fires and wildfires.
- At risk from a dam breach.
- In a seismic hazard zone.
An NHD often runs more than 40 pages long. In addition to major natural disasters, the report discloses whether a home is at risk for minor hazards that could make insuring the home more expensive or riskier to live in, such as buying a home in an airport influence area.
When you sell a property, your listing agent usually orders an NHD report from a third-party company before finalizing the sale or at escrow. The report typically costs home sellers $50 – $150, depending on the length.
Once buyers get the NHD report, they can review the document to help them decide what to do. If they decide to buy the house, they must sign the Natural Hazard Disclosure Statement.