For the prior video feature in this series covering a broker’s use of a natural hazard expert to gather information from the public record and limit liability, click here.

Buyer’s agent’s duty to deliver

It is the buyer’s agent who has the duty to hand the buyer the Natural Hazard Disclosure (NHD) Statement the buyer’s agent receives from the seller or the seller’s agent, called delivery. [Calif. Civil Code §1103.12(a); see RPI Form 314]

The buyer’s agent, on receiving the NHD form from the seller’s agent, owes the buyer a special agency duty to care for and protect the buyer’s best interest. This is accomplished by reviewing the NHD Statement themselves for any disclosure which might affect the property’s value or its desirability for the buyer. The buyer’s agent then delivers the NHD to the buyer and makes any recommendations or explanations they may have regarding the adverse consequences of its content. [CC §§1103.2, 1103.12]

If the buyer does not have a broker, the seller’s agent is responsible for delivering the NHD Statement to the prospective buyer.

The task of explaining the consequence of living with a natural hazard is the duty of a buyer’s agent. If the buyer is not represented by an agent, the buyer undertakes the duty to protect themselves and investigate the consequences of the NHD information handed to them.

Delivery may be in person or by mail. Also, delivery is considered to have been made if the NHD is received by the spouse of the buyer. [CC §1103.10]

Sellers occasionally act as “For Sale By Owners” (FSBOs) and directly negotiate a sale of their property with buyers and buyer’s agents. Here, the seller is responsible for preparing or obtaining an NHD statement and delivering the NHD Statement to the prospective buyer – prior to entering into the purchase agreement.

Other disclosure statements distinguished

The NHD Statement handed to a prospective buyer is unrelated to the environmental hazards and physical deficiencies in the soil or property improvements. These hazards are disclosed by use of the Transfer Disclosure Statement (TDS) and provisions in the purchase agreement. [See RPI Form 304 §C(1)]

The NHD Statement discloses risks to life and property which exist in nature due to the property’s location, risks known and readily available from the public records (planning department).