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This form is used by a seller’s agent when preparing a listing/marketing package or performing a due diligence investigation on a property, to authorize a Natural Hazard Disclosure (NHD) provider to prepare an NHD report for disclosing property conditions to a buyer.

rpi-131-authorization-to-prepare-natural-hazard-disclosure

Your use of RPI Form 131

Investigative reports flesh out the marketing package

The primary objective of a seller’s agent on taking a listing is to solicit and locate prospective buyers who submit an offer to acquire the listed property, as sufficiently disclosed by the seller and their agent so not to mislead the buyer about its condition. When a prospective buyer is located, directly or indirectly via a buyer’s agent, the seller’s agent owes the buyer a general duty to voluntarily and promptly provide critical information on the listed property that might adversely affect its value. This property information is collectively referred to as material facts.

Upfront factual disclosures put the buyer on notice of conditions on or about the property known to the seller or the seller’s agent. Without this information, a prudent buyer is unable to set a price and make an offer. For the most efficient delivery of property information for timely presentation to prospective buyers, the seller’s agent at the listing stage gathers data on the property and organizes it into a marketing package.

The marketing package contains third-party investigative reports prepared by unbiased professionals or government agencies addressing essential aspects of the property’s condition that are of concern to prudent buyers. [See RPI Form 133]

Two of the recommended third-party reports to be included in the marketing package are:

  • Natural Hazard Disclosure Statement (NHD), provided by an NHD expert [See RPI Form 131]; and
  • home inspection report (HIR) to accompany mandated property disclosures. [See RPI Form 130]

These reports put a face on the property so it can be fully evaluated by prospective buyers and a sale more effectively negotiated. Negotiations with a prospective buyer triggering a full disclosure commence when the prospective buyer or their agent first seeks out additional information on the listed property beyond the minimal data contained in a promotional flier.

A unified NHD disclosure for all real estate sales

Natural hazards come with the location of any parcel of real estate, not due to 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;
  • very high fire hazard severity zones;
  • wildland fire areas;
  • earthquake fault zones; and
  • seismic hazard zones.

The existence of a hazard due to the geographic location of a property affects its desirability, and thus its value to prospective buyers — a material fact requiring disclosure before contracting to sell. 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 readily available in public records.

To unify and streamline the disclosure by a seller (and in turn the seller’s agent) for a uniform presentation to all buyers concerning a property’s natural hazards, the California legislature created a statutory form entitled the Natural Hazard Disclosure (NHD) Statement, unique to California specifically. [See RPI Form 314]

Use of an expert to avoid seller liability

Delivery of natural hazard information is mandated on all types of real estate. [CC §1103.1(b)]

All sellers of real estate, and any seller’s or buyer’s agents involved, have a general duty owed to prospective buyers to disclose conditions on or about a property which are known to them and might adversely affect the buyer’s willingness to buy or influence the price and terms of payment the buyer on knowing the facts is willing to offer.

Natural hazards, or the lack thereof, irrefutably affect a property’s desirability, and thus value to a prospective buyer.

To obtain the natural hazard information, the seller and the seller’s agent are required to exercise ordinary care in gathering the information. They may gather the information themselves or the seller may employ an NHD expert, such as a geologist, to gather the information.

When an expert is employed, the expert prepares the NHD form for the seller and the seller’s agent to review, add any comments, sign and include in the marketing package to be delivered to prospective buyers seeking additional information on the property. [CC §1103.4(a)]

For the seller and the seller’s agent to rely on an NHD report prepared by others, the seller’s agent need only:

  • request an NHD report from a reliable expert in natural hazards, such as an engineer or a geologist who has studied the public records (as some natural hazards do not pertain to engineering or geology);
  • review the NHD form prepared by the expert and enter any actual knowledge the seller or seller’s agent may possess, whether contrary or supplemental to the expert’s report, on the form prepared by the expert or in an addendum attached to the form; and
  • sign the NHD Statement provided by the NHD expert and deliver it with the NHD report to prospective buyers or buyer’s agents on commencement of negotiations, but always prior to the seller’s acceptance of an offer. [CC §1103.2(f)(2)]

The Natural Hazard Disclosure scheme encourages brokers and their agents to use natural hazard experts to gather and report the information publicly available from the local planning department rather than do the work themselves. The use of an expert to gather information from the public record and prepare the report relieves the seller’s agent of any liability for errors not known to the agent to exist.

Hiring an NHD expert

The Authorization to Prepare Natural Hazard Disclosure published by RPI is used by an agent to document the request for an inspection, ordered by behalf of the seller (or buyer). It authorizes an NHD expert to prepare an NHD report for disclosing property conditions to a buyer. [See RPI Form 131]

The Authorization to Prepare Natural Hazard Disclosure contains:

Revision history

Form updated 06-2017 to include the Form Description at the top, white header/footer convention and RPI branding.

Form navigation page published 09-2017. Updated 10-2023.