Natural Hazard Disclosure California

The California Natural Hazard Disclosure industry remains unregulated by the government and is plagued with gimmicks and misinformation.  The NHD zone statement is one of the riskiest most litigious documents in the Real Estate transaction. This industry was created over 30 years ago by Carlos Siderman and incorporated years later under the name of Property ID Corporation.


Although significant efforts have been taken by Property ID Corp and Carlos Siderman to guide the industry so that home buyers, sellers and real estate practitioners would be shielded from liability, irresponsible California NHD companies continue to tarnish the industry and turn the NHD report into a rich haven for plaintiffs.


Because the natural hazard zone disclosure industry remains unregulated, there is no educational, permit, or licensing requirement to own a natural hazards disclosure company. Unfortunately, with an important sounding company, a pretty logo, and some nice letterhead, you can be in the natural hazard zone disclosure business.


Natural Hazard Disclosure Companies: Who is for “Real” in California Real Estate?


In recent years, several Title Companies have entered the NHD business. These are the same companies that took pride in announcing their massive job creation in India but touting that they are the cornerstone of the USA industry. Taking California jobs to India is not an American ideal. 


Many NHD companies came to the industry to make a quick buck and now they're gone.  Interestingly, most of these NHD companies marketed their reports based only on the cost of their reports, not on completeness, accuracy, or insurance of those reports. Some agents chose to “save” their clients as little as $10 on an NHD report in a transaction involving millions of dollars.  They may have sacrificed their client’s security without comparing the significant differences in the quality:  which in NHD terms means content, accuracy and insurance.


It is interesting to note the extent of the gimmicks such as natural hazard disclosure companies offering different types of NHD reports: Bronze report, Silver report, Gold report etc. One can imagine an attorney asking a real estate agent to specify why he ordered his client a Silver report instead of the Gold report and to explain his research.  Since the California civil code is clear about what is required in a standardized hazard report, how can one company sell three different levels of real estate information?



Lawsuits are the devil that brings knowledge from the wrong door.


A simple system to protect real estate agents from "make believe NHD reports". Follow these simple steps as a matter of safe practice:

  1. Do not do business with a natural hazard disclosure company that is not willing to put in writing that their report complies with any and all NHD requirements.
  2. Do not do business with an NHD company that is not willing to put in writing that they will remain responsible for any loses due to their errors, inaccuracies or lack of required content.
  3. Do not do business with a hazard zone report company that is not willing to put in writing that they will insure the parties to the transaction and provide certificates of insurance.
  4. Do not do business with a California real estate NHD corporation that is not willing to put in writing the address of their offices or plant in California and an open invitation to visit the location at any time.


The NHD industry was created to insulate California home buyers, sellers, and real estate agents from the liability associated with failure to provide disclosures material to the desirability and value of a property. Researching and selecting NHD reports based on content, responsibility of the natural hazard disclosure companies, insurance, longevity and proven record and ownership is required to sustain your fiduciary duty to your clients.  Saving $10 is not a reason to choose such an important property information document. Click here to order a full standardized disclosure statement form from Property ID Corporation.

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