The NHD Report: Who Gets It, What’s It Cost and When Is It Needed During a Sale?

Written by Will Caldwell

The NHD Report is a required part of California real estate transactions. It must be provided for all residential and commercial real estate sales. The Natural Hazard Disclosure indicates if a property lies within one of the state’s six primary hazard zones, which include Very High Fire Risk zones, Wildland Fire areas, Earthquake Fault Zones, Seismic Hazard areas, Special Flood Hazard areas and Dam Inundation zones. 

In addition, these reports provide vital information on additional issues that could affect the property, such as proximity to a military ordnance zone or airport influence area. The NHD Report even provides information regarding property taxes and special assessments. 

Available in a standardized, easy to understand format, these reports help fulfill the seller’s obligation to inform potential buyers of all known hazards and defects related to their property. Buyers can review this information and determine whether they want to go through with the purchase or not.

Needless to say, the NHD Report is one of the most important parts of any real estate transaction in California. But many are still unsure how they can obtain and use this document. Thankfully, the process is relatively straightforward.

Who Gets the Natural Hazard Disclosure?

Under California law, the seller of the property is required to provide disclosures to the buyers. With NHD Reports, this means that the seller obtains the report, and then sends it to the buyer.

The Natural Hazard Disclosure must be provided by a third party — the seller and their agent can’t make a list of perceived hazards themselves. Obtaining the information from a third party ensures that all information is accurate and unbiased. It gives both the seller and buyer a comprehensive understanding of the potential hazards that could influence the property.

Of course, it isn’t enough to simply receive the NHD Report. Buyers must carefully review the information contained within the report to identify if there are any major concerns. The seller is not responsible for how carefully (or not) the buyer reviews the paperwork. If the buyer has received the paperwork and signs off saying that everything is acceptable, they cannot hold the seller liable for future damages related to natural hazards.

How Much Does the NHD Report Cost?

Sellers already have a lot of costs to deal with during a real estate transaction, such as closing fees and agent commissions. While the NHD Report is an essential part of a California home sale, we know that it shouldn’t become a financial burden during this time.

We offer highly affordable pricing for our NHD Reports. Our Standard Residential Report costs $69.95 and includes Natural Hazard Disclosures, a Hazard Map and Tax Information for the property in question. Our Premium Residential Report includes all of these items, as well as additional Environmental Disclosures for $99.95.

Our reports for commercial properties are also priced affordably. Our commercial reports are meant for properties with five or more units. The Standard Commercial Report includes all the information you’d find in the comparable residential report for $84.95. The Premium Commercial Report adds Environmental Disclosures to bring the total price to $114.95.

The low costs of these reports are further put in perspective when you consider the potential costs that could arise if you fail to provide a Natural Hazard Disclosure for your property. For example, if you sold a house in an Earthquake Fault Zone and failed to disclose this information to the buyer, you could face a civil lawsuit if the property later experienced earthquake damages.

The buyer could successfully argue that they might not have bought the property if they had known it was in an Earthquake Fault Zone, or that they would have purchased earthquake insurance coverage. Your failure to disclose such important information caused them to suffer significant losses, and would put you in violation of California law. The financial consequences would be severe.

While you can cancel the NHD Report (and your payment responsibility) if escrow cancels, you cannot use the same report for different transactions. The report is only valid for the sale that it was initially issued for. You would need to order a new report for a new transaction. 

When Is It Needed? 

Under California law, the NHD Report must be provided to potential buyers at the same time the home inspection is completed. At SnapNHD, we make this extremely easy by delivering most reports to you almost immediately after you request them. These reports are delivered via email or text. Typically, it should never take more than 15 minutes to deliver your NHD Report. We will inform you if it will take any longer.

Delivering the NHD Report at the same time as the home inspection allows buyers to review all relevant disclosures regarding the property at the same time. Buyers can take up to three days to look over this information and decide whether they want to withdraw their offer or renegotiate with the seller. 

If the buyer decides that the information contained within the NHD Report is acceptable, then all parties involved in the transaction will sign a NHD statement. 

The timing of the report is advantageous to both the buyer and the seller because it allows buyers to review all relevant disclosures at the same time. It would hardly be fair or convenient if the buyer were to request items be repaired following a home inspection, only to back out of the sale a week later because of the Natural Hazard Disclosure.

This timing ultimately helps the transaction proceed in a timely manner, which will help everyone involved get the results they want that much faster.

Making the Most of Your Report

The NHD Report is a vital part of every California real estate transaction. While buying or selling a home can often be complex, the Natural Hazard Disclosure is actually fairly simple.

When you order your report from SnapNHD, you can have confidence that you’ll get accurate, up to date information. By following these basic steps for obtaining the report, both buyers and sellers can move forward with confidence.