Earthquake hazard disclosures required by state law
Earthquakes, especially major ones, are dangerous and a fact of life in California. Sooner or later, another “big one” will occur.
The requirements for disclosure relating to natural hazards, which includes earthquakes, vary depending on the property type.
Related Video: Earthquake Fault Zones and Seismic Hazards
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For residential property, the seller completes the Residential Hazards Disclosure Report to the best of their knowledge and delivers it to the buyer when the property was built before 1960. [See RPI Form 315]
In conjunction with the Residential Hazards Disclosure Report, the seller or their agent also provides the buyer with a copy of the Homeowner’s Guide to Earthquake Safety pamphlet, found in the Hazards Disclosure Booklet. [See RPI Form 316-1]
The report and pamphlet is in addition to the standard real estate Transfer Disclosure Statement (TDS), also required by law. [See RPI Form 304]
For commercial property, the seller completes the Commercial Property Earthquake Disclosure Report and delivers it to the buyer, when the commercial property has either:
- precast (tiltup) concrete or reinforced masonry walls with wood-frame floors or roofs, built before 1975;
- unreinforced masonry;
- non-ductile concrete;
- a soft or weak story or open front; or
- a steel frame built before 1995.
Additionally, California state law requires a seller of commercial property to deliver to the buyer as soon as practicable and before the transfer a copy of the Commercial Property Owner’s Guide to Earthquake Safety when:
- the commercial property was built before 1975; or
- the property is a precast concrete or reinforced masonry building with wood frame floors or roofs. [Calif. Gov Code §8893.2]
The Commercial Property Owner’s Guide to Earthquake Safety booklet describes common weaknesses that may result in earthquake damage in a commercial building and provides steps a seller may take to correct those weaknesses. [See RPI Form 316-2]
The booklet, developed and adopted by the California Seismic Safety Commission, also assists a seller of commercial property in filling out the Commercial Property Earthquake Disclosure Report. [See RPI Form 315-1]
Earthquake hazard disclosure for residential property
California state law requires the seller of a one-to-four unit residential property to:
- inform the buyer about known home weaknesses;
- anchor, brace or strap the water heater, reducing the chance of it falling during an earthquake and possibly causing gas and water lines to break;
- deliver a copy of the Homeowner’s Guide to Earthquake Safety booklet to the buyer when the home was built before 1960 [See RPI Form 316-1];
- deliver to the buyer a Natural Hazards Disclosure (NHD) form, which will alert buyers to whether the home is in an Earthquake Fault Zone or a Seismic Hazard Zone [See RPI Form 314]; and
- complete the Residential Earthquake Hazards Report and provide it to the buyer. [See RPI Form 315]
California state law does not require the seller to:
- hire someone to evaluate the property; or
- strengthen their home before selling it.
Sellers need to disclose all known defects and deficiencies in the property – including earthquake weaknesses and hazards – to prospective buyers. [Calif. Civil Code §1102]
However, in filling out the Residential Earthquake Hazards Report, sellers are not required to:
- remove sliding, drywall or plaster in order to answer the questions;
- hire anyone to inspect their homes; or
- fix the weaknesses before they sell their homes.
When a question on the form describes only a portion of the house – for example, when part of the house is anchored to the foundation and the other part is not – the answer is “no” because a portion of the house is not properly anchored.
A seller or seller’s agent uses the Residential Earthquake Hazards Report published by RPI (Realty Publications, Inc.) when selling a one-to-four unit residential property built before 1960 and when preparing a marketing package in compliance with earthquake hazard disclosure mandates. The form identifies any potential earthquake weaknesses the property may have. [See RPI Form 315]
The form includes a checklist of questions, designed for the seller to answer to the best of their knowledge, with a corresponding page number for the seller to consult in the Homeowner’s Guide to Earthquake Safety, giving more information on each question. [See RPI Form 316-1]
When a seller lacks actual knowledge as to whether the weakness exists, they answer with “Don’t Know.” When the property does not have the feature referenced, the seller answers with “Doesn’t Apply.”
When any of the questions are answered “No,” the house is likely to have an earthquake weakness. Buyers may then take this factor into account when negotiating on the sale of a property.
Earthquake disclosure for commercial property
Like the residential disclosure on earthquake weaknesses, the Commercial Property Earthquake Disclosure Report informs buyers of potential seismic hazards that may come with a parcel of commercial property. The form is to be filled out and delivered as soon as practicable when the commercial property:
- was built before 1975;
- is a precast concrete or reinforced masonry building with wood frame floors or roofs;
- has unreinforced masonry;
- has non-ductile concrete;
- contains a soft or weak story or open front; or
- has a steel frame built before 1995.
A seller or seller’s agent uses the Commercial Property Earthquake Disclosure Report published by RPI, together with a copy of the Commercial Property Owner’s Guide to Earthquake Safety, to identify any potential earthquake weaknesses a commercial property may have. [See RPI Form 315-1]
The form includes a checklist of questions, designed for the seller to answer to the best of their knowledge, with a corresponding page number for the seller to consult in the Commercial Property Owner’s Guide to Earthquake Safety, which gives more information on each question. [See RPI Form 316-2]
As with the residential version of the form, sellers of commercial property are to disclose their knowledge of weaknesses known to exist. The seller will answer with “Don’t Know” when they lack knowledge, and “Doesn’t Apply” when the building lacks the referenced feature. Questions answered “Don’t Know” may indicate a need for further evaluations by the buyer. When any of the questions are answered “No,” the building is more likely to suffer severe damage during an earthquake.
