Anyone selling or buying a home/property in the state of California needs a geological report!
According to the California Civil Code 1102.6, sellers of most residential property are required to provide prospective buyers with what is commonly known in the real estate community as the "TDS" – or Transfer Disclosure Statement. This document requires sellers to make known any facts that may impact the value of the property. The TDS provided by the California Association of Realtors attempts to simplify this by creating a form which asks the seller to answer a few pages of questions and give details when needed. When selling a property, it is important to remember the motto: disclose, disclose, disclose.
In 1998, the state added to the TDS by requiring sellers to disclose material facts of any knowledge that might “limit your ability to develop the real property, to obtain insurance, or to receive assistance after a disaster”. The responsibility of this disclosure rests solely on the seller and the seller’s agent and is referred to as the “Natural Hazards Disclosure Report” (NHDR). Remember, the state had many natural disasters just before this mandatory requirement: fires in Oakland, Santa Barbara, Malibu, Laguna Beach; earthquakes in the San Francisco Bay Area, and Los Angeles area; and great floodings in 1995 and 1997. So, it seems logical that this disclosure law came into affect.
** The NHDR requires the seller alert the buyer if the property is located in one of six specified areas: SPECIAL FLOOD AREA, an AREA OF POTENTIAL FLOODING, A VERY HIGH FIRE HAZARD SEVERITY ZONE, WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISK AND HAZARD, an EARTHQUAKE FAULT ZONE, and a SEISMIC HAZARD ZONE.
So, you may ask yourself – I want to sell my house but I don’t have a PhD in Meteorology or Geotechnical Engineering – what do I do? Well, there are many companies that provide a NSDR service for you. Your real estate professional can recommend some of the more respected companies for the creation of this report. Once you order a report for your specific property address, you will get a packet of information that will then be signed by the seller and the seller’s agent. It will average between 30-50 pages and will most likely overwhelm you! But don’t let it! Once broken down, it is easy to understand. The beginning of the report will provide maps and tell you quickly if you ARE, or ARE NOT in one of these specified zones. The remainder of the information will detail the type of zone you are in (if you are in one) and give loads of information for the seller and prospective buyer regarding the area. Some of the companies even go as far as to include additional disclosure information such as advisories from Megan’s Law to Endangered species. Some reports may also contain information regarding local area specific ordinances and local property tax bonds and details.