What's a Natural Hazard Disclosure (NHD) Report? Learn the Costs, Timeline, and Who Pays

By Craig Donofrio

Posted on August 8th, 2022

Who pays for an NHD report? | Who prepares NHD reports? | What's included | Do I need one? | Other California disclosures | FAQs

home on Jenga

⚠️ What is an NHD report in real estate? ⚠️

A Natural Hazard Disclosure (NHD) report is a legal disclosure form that is required in California for almost all home sales. NHD reports indicate if a home is located in an area that is prone to flooding, fires, earthquakes, or seismic activity.

If you're selling a home in California, you'll need to provide a natural hazard disclosure (NHD) report to potential buyers. NHD reports were first put into effect under California's Natural Hazard Disclosure Act of 1998, and today remain a required disclosure for most home sales.

An NHD report tells the buyer if your property lies within any of these six types of hazard areas:

  • Special flood hazard area

  • Dam failure inundation

  • Very high fire severity

  • Wildfire zone

  • Earthquake fault zone

  • Seismic hazard zone

Those six hazards are required to be included in the NHD report. The NHD report can also include optional supplemental information, such as:

  • Radon gas exposure

  • Airport influence area

  • Megan's Law disclosures

  • Military ordinance area

  • Additional tax information

👉 Jump to: What's in a Natural Hazard Disclosure Statement?

NHD reports are about 50 pages long (or longer!) and add even more paperwork to California's lengthy list of disclosure requirements. And if your home falls in one of those six hazard categories, you'll need some extra help in reassuring potential buyers.

That's why most home sellers enlist the help of a qualified real estate agent. A real estate agent can help ease the stress of navigating unfamiliar legal documents, saving you time and energy while ensuring your sale goes smoothly.

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Who Pays for an NHD Report and What Does It Cost?

  • 🤔 Who Pays: Home sellers usually pay for the NHD report.

  • 💰 Cost: Approximately $50–$140 for residential properties, or slightly more if you have to include supplemental hazard information.

  • 🗓️ When You Pay: At or before closing

A note about the timeline: We recommend paying for an NHD report before closing because you can reuse it if your deal falls through. Some NHD companies offer a discount if you pay for the report before closing!

If you opt to pay for your NHD report at closing and the deal falls through, you won't be on the hook for costs.

Instead, you would need to order a fresh report for when you find a new buyer and pay for it when the deal closes.

⚠️ An NHD report allows buyers to back out of an offer.

Under California law, all disclosures — including the NHD report — must be given to the buyer within seven days after an offer is accepted.

The buyer then has three days to review the NHD report. If they see something they don't like, they can withdraw their offer — and get their earnest money back.

Who Prepares the Natural Hazard Disclosure Statement?

A third party company should prepare the NHD report — not you. Reputable NHD companies will know the laws and regulations required to accurately compile the report, and they'll have insurance to protect against errors.

NHD reports can be purchased online and typically take less than one day to complete.

What's in a Natural Hazard Disclosure Statement?

There are the six required items on an NHD statement:

Hazard

Definition

🐳 Special flood hazard area

An area identified by FEMA that may be prone to flooding, mudflow or flood-related erosion hazards. Lenders require homes located in special flood hazard areas to have flood insurance.

🌊 Dam failure inundation

An area that will flood if a nearby dam breaks.

🚒 Very high fire severity

Areas that are susceptible to fire based on factors like fire history, potential fuel, and fire weather.

🔥 Wildfire zone

A wildland area prone to fires.

⚡ Earthquake fault zone

An area that lies on an Alquist-Priolo earthquake fault zone

🌟Seismic hazard zone

An area that is prone to earthquakes and landslides

NHD companies can also include supplementary information for an additional price:

Supplemental hazard

Definition

💨 Radon gas exposure

Areas that are at a high risk for radon gas.

🛫 Airport influence area

An area where there is airport-related noise (it could also be an area where airport influence will exist in the future).

🚨 Megan's Law disclosures

Whether or not a registered sex offender lives in the neighborhood. This information is publicly available.

🎖️ Military ordinance disclosures

Areas where there is a formerly used defense site (FUD) within one mile. These sites are inoperable but may still have toxic waste or hazardous materials present.

💎 Mining operations

If a mining operation is within one mile of the property.

💵 Mello-Roos tax

If the home is located in a special district with an additional tax burden to compensate for Proposition 13's property tax cap.

💸 1915 Act Bond tax

A tax for homes located in certain districts to improve things like streets and sewers.

Do I Need to Provide an NHD Report?

In almost all traditional home sales in California the seller needs to provide an NHD report to the buyer.

However, there is an uncommon exception. If a Transfer Disclosure Statement (TDS) isn't necessary, neither is an NHD report.

The TDS covers a broad range of disclosures, like known property defects. It's required in most home sales, but there are some exceptions, including:

  • Transfers from one co-owner to another co-owner

  • Transfers to a spouse or immediate family member

  • Court-ordered transfers

  • Residential properties of five or more units

  • Commercial, industrial, vacant land or agricultural properties

You can read more about Transfer Disclosure Statement Law exemptions on the California Association of Realtors website. Ask your agent or a real estate attorney before skipping the TDS form.

What Other Disclosures Do I Need?

Typical required disclosures in California include:

  • Major property defects (like a leaky roof)

  • The condition of appliances

  • Lead paint disclosure for homes built before 1978

  • If anyone died on the property in the last three years

  • Termite or pest inspection (if required by the buyer's lender)

  • Condition of smoke detectors and if they are in compliance

  • Water heater bracing requirements

This extensive guide from California's Department of Realtors reviews everything a seller needs to know about selling a home in California without falling into legal trouble.

It's important that you properly disclose everything that's required by California law. Not doing so can open you up to legal risk, even after closing. That's why we recommend having a solid real estate agent in your corner.

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FAQs

What is an NHD report?

A natural hazard disclosure (NHD) report is a legally-mandated disclosure form for most home sales in California. It covers whether a home is located in a hazard area that is prone to flooding, fires or earthquakes. Learn more about NHD reports.

How long are NHD reports good for?

NHD reports don't expire, but they can become outdated when government maps change. Speak with a real estate agent if you're not sure if you need a new NHD report for your home sale. Learn more about when and how to pay for NHD reports.

Who prepares a natural hazard disclosure statement?

A third party will prepare the NHD report, and it must be given to the buyer within seven days after accepting an offer. Learn more about who prepares NHD reports.

Who pays for the natural hazard disclosure report?

The seller typically pays for the NHD report. NHD reports can be purchased before a sale is completed or at escrow when the deal closes. If the deal doesn't close, then the seller doesn't pay. Learn more about who pays for NHD reports.

How much is a natural hazard disclosure report?

NHD reports typically cost about $50–$140 for most residential home sales. Higher prices usually mean supplementary information is included. Some NHD companies offer a discount for sellers who purchase an NHD report before closing. Learn more about NHD report costs.

What hazard is not included in the natural hazard disclosure statement?

Hazards like mold, termites, and the presence of asbestos are not covered in NHD reports. Those hazards can be uncovered during the home inspection and the seller may be required to disclose those facts if previously known. Learn more about what's included in the NHD report.

What is a JCP report?

A JCP report is a natural hazard disclosure report provided by the company JCP-LGS Disclosures.com, which is owned by First American. Learn more about what NHD reports cover.

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Posted in Seller's Disclosure, Selling a House