There are certain disclosures to be made by the seller at the time of selling property. These disclosures should be produced to the potential buyers before exchange, sale, transfer, or even the ground lease of a residential property.
Owners of residential properties must provide a natural hazard disclosure statement to the purchaser that describes the condition of property, and other potential hazards nearby.
What Should the Disclosure Report Contain?
In addition to standard statement by the civil board, the disclosure must contain details about areas susceptible to natural disasters, earthquakes, fires, and repeated floods. They should give a separate statement if the property lies within these specific areas.
- A special fire hazard zone is designated by the California Department of fire and forestry protection.
- An area with flood hazard selected by Fed Emergency Management agency.
- A wild land fire area designated by State Board, checking substantial forest hazard and fire risks.
- A seismic hazard zone and earthquake fault zone authorized by the State Geologist.
- A region of potential flooding during the time of dam failure created by Emergency Services Officers.
Repeated earthquakes, fires, floods, and other natural disasters have impelled state lawmakers to mandate sellers to inform purchasers about the condition of the property they might buy.
The real estate agent and seller involved in the selling, exchange or transfer process must form a transfer disclosure statement and hand it over to the purchaser. It’s mandatory for all the realtors and sellers involved in the transaction process to state all the facts about the property clearly, sinceas it may potentially influence the buyer’s decision.
Disclosures for New Properties
During the sale of the new houses, as part of project,a public report has to be formed and delivered to the buyer. If the new house is sold through real estate agent, not a developer, then the broker has to disclose facts that might affect desirability, and value of the property.
Importance of Natural Hazard Disclosure
There are certain things to be followed when delivering the transfer disclosure statement; if you want to avoid your client cancelling the deal after execution, you should hand over a copy of this statement to your buyer during the time of negotiating the deal. You can also deliver the disclosure statement to the buyers during the physical inspection.
Unless the property is free from disclosure prerequisites, all real estate agents and sellers must reveal if the property is located in a natural hazard zone, like fire, flood, or seismic zone.
The disclosure must be prepared as a legal statement and usually, the seller appoints a third party to prepare a report and complete the natural hazard disclosure declaration. The real estate agents or sellers, and buyers must also acknowledge and sign the statement.
The buyer has the right to reject the deal if the disclosures are not produced to them after the execution of the deal. If the statement is personally handed over to the buyer, he/she has 3 days of time to reject the offer, while if it was sent through email buyer has5 to 6 days to terminate the contract in case of any discrepancies.