A unified disclosure for all sales
Natural hazards come with the location of a parcel of real estate, not with the man-made aspects of the property. Locations where a property might be subject to natural hazards include:
- special flood hazard areas, a federal designation;
- potential flooding and inundation areas;
- seismic hazard zones;
- earthquake fault zones
- very high fire hazard severity zones; and
- wildland fire areas. [Calif. Civil Code §1103(c)]
As the wild fire season in California continues to imperil the state, the risks presented by wildfires are becoming an increasing visible—and critical—concern for homebuyers. In turn, real estate professionals need to be prepared to answer questions and make recommendations on wildfire safety for both homebuyers considering property in these high-risk areas, as well as the sellers they represent who need to consider making fire safety improvements before selling.
The existence of a fire hazard due to the geographic location of a property affects its desirability, and thus its value to prospective buyers. Hazards, by their nature, limit a buyer’s ability to develop the property, obtain insurance or receive disaster relief.
Whether a seller lists the property with a broker or markets the property themselves, the seller is to disclose to prospective buyers any natural hazards known to the seller, including those contained in public records.
To unify and streamline the disclosure by a seller (and in turn the seller’s agent) for a uniform presentation to buyers concerning natural hazards which affect a property, the California legislature created a statutory form entitled the Natural Hazard Disclosure (NHD) Statement. [See RPI Form 314]
Very high fire hazard severity zone
Areas in the state which are subject to significant fire hazards have been identified as very high fire hazard severity zones. If a property is located in a very high fire hazard severity zone, a disclosure needs to be made to the prospective buyer. [See RPI Form 314 §3]
The city, county or district responsible for providing fire protection have designated, by ordinance, very high fire hazard severity zones within their jurisdiction. [Calif. Government Code §51179]
The fire hazard disclosure on the NHD form mentions the need to maintain the property. Neither the seller nor the seller’s agent need to explain the nature of the maintenance required or its burden on ownership. Advice to the buyer on the type of maintenance and the consequences of owning property subject to the maintenance are the duties of the buyer’s agent, if they have an agent.
For example, a buyer occupying a residence located in a very high fire hazard severity zone is advised by the buyer’s agent that as the new owner, the buyer is to, among other things:
- maintain a firebreak around the structure of a distance of no greater than 100 feet, but not past the property line, unless the state or local law requires more; and
- clear dead or dying wood from trees and plants adjacent to or overhanging the structure. [Gov C §51182]
Also, if the property is in a very high fire hazard severity zone or a wildland area, the buyer’s agent ought to inform the client of the possible hardships in obtaining fire or hazard insurance and of the existence of the California Fair Access to Insurance Requirements (FAIR) program which offers a “last-resort” type of policy for properties in these areas. [Calif. Insurance Code §§10095 et seq.]
State Fire Responsibility Areas
If a property is in an area where the financial responsibility for preventing or suppressing fires is primarily on the state, the real estate is located within a State Fire Responsibility Area. [Calif. Public Resources Code §4125(a)]
Notices identifying the location of the map designating State Fire Responsibility Areas are posted at the offices of the county recorder, county assessor and the county planning agency. Also, any information received by the county after receipt of a map changing the State Fire Responsibility Areas in the county needs to be posted. [Pub Res C §4125(c)]
If the property is located within a wildland area exposed to substantial forest fire risks, the seller or the seller’s agent is to disclose this fact. If the property is located in a wildland area, it requires maintenance by the owner to prevent fires. [See RPI Form 314 §4]
In addition, the NHD Statement advises the prospective buyer of a home located in a wildland area that the state has no responsibility for providing fire protection services to the property, unless the Department of Forestry and Fire Protection has entered into a cooperative agreement with the local agency. No further disclosure about whether a cooperating agreement exists need be made by the seller or seller’s agent. [See RPI Form 314 §4]
However, if property disclosures place the property in a wildland area, the buyer’s agent has the duty to advise the buyer about the need to inquire and investigate into what agency provides fire protection to the property.