NHD Reports a Grey Area? Not with Property ID Corp
The real estate market has changed and we are now faced with several "grey areas" when it comes to real estate disclosures for Bank and/or REO properties. What is the bank's responsibility and what is the agent's responsibility when it comes to disclosing legally mandated information to any potential buyer? I have had many agents in recent months tell me that they believe that there is no need to provide a Natural Hazard Disclosure Report ("NHD reports"), because they have been informed by the bank that they are "exempt" from providing natural hazard zone disclosure statements, which is UNTRUE.
The CAR REO Advisory form states the following, "The Seller of the Property is a lender who has acquired title to the Property either by foreclosure or through a deed given in lieu of foreclosure. Many obligations imposed upon sellers, particularly sellers of real property containing one-to-four dwelling units, may not be applicable to the sale of the Property. However, even though Seller is exempt from certain obligations, a real estate broker's obligations may still apply. It states under Exemptions, that the Seller is exempt from providing Buyer with the Real Estate Transfer Disclosure Statement (TDS), Natural Hazard Disclosure Statement Form (NHD), a Mello-Roos District lien disclosure, an Improvement Bond Act of 1915, a Supplemental Property Tax notice, and a Notice of Private Transfer Fee pursuant to California Civil Code 1102 et seq."
But under Requirements "The Seller is not exempt from applicable statutory obligations to disclose earthquake fault zones, seismic hazard zones, state fire responsibility areas, very high fire hazard severity zones, special flood hazard areas and flood hazard zones pursuant to the Public Resources Code and United States Code, even though, pursuant to the Civil Code, the specific NHD report form is not required to be completed."
So what does this mean to you as a Real Estate Agent? The bank is not responsible for providing the NHD disclosure resource page itself, but the seller and the Realtors are indeed responsible for providing all Local, State and Federal Disclosures to any potential home buyer as required by other sections of California real estate law. If the bank does supply your client with an NHD, make sure that it is providing all the legally required real estate disclosures to your buyer. As an agent, you can explain to your buyer the importance of the NHD Report and that they might want to look into purchasing their own NHD Report that is not only thorough but accurate, with an Insurance Policy set in place to protect them as a buyer and you as a Realtor if anything should go wrong. After all, natural hazard disclosures, regardless of the NHD statement itself, are material fact for any potential buyer purchasing any property in the State of California. Property I.D. Corp provides residential REO natural hazard disclosure statements for real estate investors, transaction coordinators and industry professionals.