Understanding The Law
AB 1195 and the Natural Hazard Disclosure Statement
On June 1, 1998, the disclosure requirements of AB 1195 went into effect thus changing the face of natural hazard disclosure throughout California. What does the law do? Simply put, AB 1195 (now known as California Civil Code 1103) mandates three natural hazard disclosures and consolidates these and previously required disclosures onto a statutory form called the Natural Hazard Disclosure Statement (NHDS). This form is now a legally required part of most residential property transactions.
- NHDReport.com has been designed to meet these requirements.
- The law applies to non-residential and "exempt" properties as well.
- Three Mandated Disclosures Added in 1998 as a Requirement of AB 1195.
AB 1195 mandated three additional disclosures for the seller and/or seller's agent. Sellers are required to disclose if their property is in a Very High Fire Hazard Severity Zone. Originating as a response to the 1991 Oakland Hills firestorm, these Zones contain a high fire risk due to topography, brush coverage, climate, etc. Properties located in a Very High Fire Hazard Severity Zone are subject to certain fire prevention property maintenance requirements.
Another disclosure requirement of listing agents under AB 1195 is disclosing if a property is within an area of potential flooding due to dam failure. These zones are delineated on Dam Inundation maps adopted by the California Office of Emergency Services ( Emergency Services (OES).
The Federal Emergency Management Agency issues maps through the National Flood Insurance Program (NFIP) defining flood hazard areas. If a property lies within a 100-year Special Flood Hazard Area (Zone "A" or "V"), federally connected lenders are required to make sure buyers maintain flood insurance on the structure. AB 1195 mandates that the seller's agent also disclose if a property is located in a Special Flood Area (any Zone "A" or "V").
Disclosure Forms and Procedures
AB 1195 also changed the way agents provide natural hazard disclosure information by creating a statutory form called the Natural Hazards Disclosure Statement (NHDS). The NHDS consolidates the newly mandated disclosures discussed above with the existing required disclosures of State Responsibility Areas, Earthquake Fault Zones and Seismic Hazard Mapping Act Zones. The new form lists each natural hazard disclosure and requires that the seller and their agent determine if a zone affects the property from their own "actual knowledge" or by reading the appropriate map. They must then mark either "yes" or "no" to indicate if the property is located within each of the zones. In a significant change to current disclosure practice, the seller and their agent sign the NHDS to "represent that the information herein is true and correct" in order to complete the form. In the case of Special Flood Hazard Areas and Areas of Potential Flooding due to dam failure, there is a space provided on the NHDS for "Don't know/Information not available from local jurisdiction" in addition to the yes and no spaces. This choice is provided because these particular disclosures are triggered by either: "Actual knowledge" of the seller or their agent The local jurisdiction has compiled a list, by parcel, of properties in the zones It is unclear when localities will compile such itemized parcel lists. However, maps are currently available delineating both dam inundation zones and the NFIP flood zones. Prudent business practice suggests providing natural hazard disclosure information from the currently available map sources whenever possible to avoid potential liability exposure. Decreased Liability Zone "A" or "V".