California Real Estate SalespersonPractice of Real Estate and DisclosuresEasy
Which of the following must be disclosed on the Natural Hazard Disclosure (NHD) Statement to a buyer?
- AThe property's HOA dues
- BThe property's current market value
- CWhether the property is located in a special flood hazard area
- DWhether the seller has ever filed an insurance claim
Show answer & explanationAnswer & explanation
Correct answer: C. Whether the property is located in a special flood hazard area
The NHD Statement discloses whether the property lies within statutorily defined natural hazard zones, including special flood hazard areas, dam inundation areas, fire hazard severity zones, and earthquake fault zones.
Why the other options are wrong
- A. HOA dues are disclosed separately, not on the NHD.
- B. Market value is not part of the NHD; that's a valuation matter.
- D. Insurance claim history is unrelated to natural hazard zone disclosure.
Natural Hazard Disclosure (NHD)
A statutory disclosure informing buyers whether a property is in one of six state-designated natural hazard zones.
- Six zones: flood, dam inundation, fire, earthquake fault, seismic hazard, wildland fire
- Often prepared by a third-party NHD company
- Must be delivered before close of escrow
Memory trick: Flood, Fire, Fault — Six Zones to Halt (a sale until disclosed)