BILL NUMBER: AB 920 CHAPTERED 06/24/04 CHAPTER 66 FILED WITH SECRETARY OF STATE JUNE 24, 2004 APPROVED BY GOVERNOR JUNE 23, 2004 PASSED THE ASSEMBLY JUNE 17, 2004 PASSED THE SENATE JUNE 14, 2004 AMENDED IN SENATE MAY 10, 2004 AMENDED IN SENATE SEPTEMBER 8, 2003 AMENDED IN SENATE SEPTEMBER 2, 2003 AMENDED IN SENATE JULY 15, 2003 AMENDED IN SENATE JULY 8, 2003 AMENDED IN SENATE JUNE 27, 2003 AMENDED IN SENATE JUNE 11, 2003 AMENDED IN ASSEMBLY APRIL 28, 2003 INTRODUCED BY Assembly Member Nakano FEBRUARY 20, 2003 An act to amend Sections 1102.6a, 1102.17, and 1103.2 of the Civil Code, relating to real estate disclosures. LEGISLATIVE COUNSEL'S DIGEST AB 920, Nakano. Real estate disclosures: nuisance: local government. (1) Existing law requires the disclosure of specified attributes of residential real property prior to the transfer of title, including disclosures required by a city or county, as specified. This bill would require a seller of residential real property, who has actual knowledge thereof, to disclose that the property is adjacent to an industrial use or affected by a nuisance created by such a use. The bill would also provide that, on or after January 1, 2005, if a city or county adopts a different or additional disclosure form regarding the proximity or effects of an airport, the form would be required to contain specified information regarding annoyances or inconveniences associated with airport operations. The bill would further provide, on and after January 1, 2006, that if a city or county does not adopt a different or additional disclosure form, the provision of an airport influence area disclosure, as specified, or if there is not a current airport influence map, a written disclosure of an airport within 2 statute miles, shall be deemed to satisfy any city or county disclosure requirements in this regard. (2) Existing law requires that certain natural hazards be disclosed pursuant to certain property transfers and that these disclosures be made on a specified statement. Existing law exempts transferors and their agents from liability for error, inaccuracies, or omissions in these disclosures when they are not within their personal knowledge, they are based on information contained in a report provided by specified parties, and ordinary care is exercised in obtaining and transmitting the information. This bill would amend the Natural Hazard Disclosure Statement to provide an optional acknowledgment that representations made in the statement are based on an independent 3rd-party report provided as a substituted disclosure, as specified, and that the transferor and the transferor's agent have not verified the information in the report and are not personally aware of any errors or inaccuracies in the statement. In connection with this acknowledgment, the bill would provide that transferors and their agents assert that they have exercised good faith in the selection of a 3rd-party report provider. The bill would provide that the legal effect of a consultant's report delivered to satisfy the exemption described above is not changed when it is accompanied by a Natural Hazard Disclosure Statement, and that these reports shall always be accompanied by a signed and completed Natural Hazard Disclosure Statement. The bill would permit an agent and a 3rd-party report provider to preprint their names on the disclosure statement, in lieu of signing, without change in legal effect. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1102.6a of the Civil Code is amended to read: 1102.6a. (a) On and after July 1, 1990, any city or county may elect to require disclosures on the form set forth in subdivision (b) in addition to those disclosures required by Section 1102.6. However, this section does not affect or limit the authority of a city or county to require disclosures on a different disclosure form in connection with transactions subject to this article pursuant to an ordinance adopted prior to July 1, 1990. Such an ordinance adopted prior to July 1, 1990, may be amended thereafter to revise the disclosure requirements of the ordinance, in the discretion of the city council or county board of supervisors. (b) Disclosures required pursuant to this section pertaining to the property proposed to be transferred, shall be set forth in, and shall be made on a copy of, the following disclosure form: (c) This section does not preclude the use of addenda to the form specified in subdivision (b) to facilitate the required disclosures. This section does not preclude a city or county from using the disclosure form specified in subdivision (b) for a purpose other than that specified in this section. (d) (1) On and after January 1, 2005, if a city or county adopts a different or additional disclosure form pursuant to this section regarding the proximity or effects of an airport, the statement in that form shall contain, at a minimum, the information in the statement "Notice of Airport in Vicinity" found in Section 11010 of the Business and Professions Code, or Section 1103.4 or 1353. (2) On and after January 1, 2006, if a city or county does not adopt a different or additional disclosure form pursuant to this section, then the provision of an "airport influence area" disclosure pursuant to Section 11010 of the Business and Professions Code, or Section 1103.4 or 1353, or if there is not a current airport influence map, a written disclosure of an airport within two statute miles, shall be deemed to satisfy any city or county requirements for the disclosure of airports in connection with transfers of real property. SEC. 2. Section 1102.17 of the Civil Code is amended to read: 1102.17. The seller of residential real property subject to this article who has actual knowledge that the property is adjacent to, or zoned to allow, an industrial use described in Section 731a of the Code of Civil Procedure, or affected by a nuisance created by such a use, shall give written notice of that knowledge as soon as practicable before transfer of title. SEC. 3. Section 1103.2 of the Civil Code is amended to read: 1103.2. (a) The disclosures required by this article are set forth in, and shall be made on a copy of, the following Natural Hazard Disclosure Statement: NATURAL HAZARD DISCLOSURE STATEMENT This statement applies to the following property: _____________________ The transferor and his or her agent(s) or a third-party consultant disclose the following information with the knowledge that even though this is not a warranty, prospective transferees may rely on this information in deciding whether and on what terms to purchase the subject property. Transferor hereby authorizes any agent(s) representing any principal(s) in this action to provide a copy of this statement to any person or entity in connection with any actual or anticipated sale of the property. The following are representations made by the transferor and his or her agent(s) based on their knowledge and maps drawn by the state and federal governments. This information is a disclosure and is not intended to be part of any contract between the transferee and transferor. THIS REAL PROPERTY LIES WITHIN THE FOLLOWING HAZARDOUS AREA(S): A SPECIAL FLOOD HAZARD AREA (Any type Zone "A" or "V") designated by the Federal Emergency Management Agency. Yes _____ No _____ Do not know and information not available from local jurisdiction _________ AN AREA OF POTENTIAL FLOODING shown on a dam failure inundation map pursuant to Section 8589.5 of the Government Code. Yes _____ No _____ Do not know and information not available from local jurisdiction _________ A VERY HIGH FIRE HAZARD SEVERITY ZONE pursuant to Section 51178 or 51179 of the Government Code. The owner of this property is subject to the maintenance requirements of Section 51182 of the Government Code. Yes _____ No _____ A WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISKS AND HAZARDS pursuant to Section 4125 of the Public Resources Code. The owner of this property is subject to the maintenance requirements of Section 4291 of the Public Resources Code. Additionally, it is not the state's responsibility to provide fire protection services to any building or structure located within the wildlands unless the Department of Forestry and Fire Protection has entered into a cooperative agreement with a local agency for those purposes pursuant to Section 4142 of the Public Resources Code. Yes _____ No _____ AN EARTHQUAKE FAULT ZONE pursuant to Section 2622 of the Public Resources Code. Yes _____ No _____ A SEISMIC HAZARD ZONE pursuant to Section 2696 of the Public Resources Code. Yes (Landslide Zone) _____ Yes (Liquefaction Zone) _____ No _____ Map not yet released by state _______ THESE HAZARDS MAY LIMIT YOUR ABILITY TO DEVELOP THE REAL PROPERTY, TO OBTAIN INSURANCE, OR TO RECEIVE ASSISTANCE AFTER A DISASTER. THE MAPS ON WHICH THESE DISCLOSURES ARE BASED ESTIMATE WHERE NATURAL HAZARDS EXIST. THEY ARE NOT DEFINITIVE INDICATORS OF WHETHER OR NOT A PROPERTY WILL BE AFFECTED BY A NATURAL DISASTER. TRANSFEREE(S) AND TRANSFEROR(S) MAY WISH TO OBTAIN PROFESSIONAL ADVICE REGARDING THOSE HAZARDS AND OTHER HAZARDS THAT MAY AFFECT THE PROPERTY. Signature of Transferor(s)____________ Date________________________ Signature of Transferor(s)____________ Date________________________ Agent(s)______________________________ Date________________________ Agent(s)______________________________ Date________________________ Check only one of the following: Transferor(s) and their agent(s) represent that the information herein is true and correct to the best of their knowledge as of the date signed by the transferor(s) and agent(s). Transferor(s) and their agent(s) acknowledge that they have exercised good faith in the selection of a third-party report provider as required in Civil Code Section 1103.7, and that the representations made in this Natural Hazard Disclosure Statement are based upon information provided by the independent third-party disclosure provider as a substituted disclosure pursuant to Civil Code Section 1103.4. Neither transferor(s) nor their agent(s) (1) has independently verified the information contained in this statement and report or (2) is personally aware of any errors or inaccuracies in the information contained on the statement. This statement was prepared by the provider below: Third-Party Disclosure Provider(s) ______________________ Date __________________ Transferee represents that he or she has read and understands this document. Pursuant to Civil Code Section 1103.8, the representations made in this Natural Hazard Disclosure Statement do not constitute all of the transferor's or agent's disclosure obligations in this transaction. Signature of Transferee(s)________________ Date___________________ Signature of Transferee(s)________________ Date___________________ (b) If an earthquake fault zone, seismic hazard zone, very high fire hazard severity zone, or wildland fire area map or accompanying information is not of sufficient accuracy or scale that a reasonable person can determine if the subject real property is included in a natural hazard area, the transferor or transferor's agent shall mark "Yes" on the Natural Hazard Disclosure Statement. The transferor or transferor's agent may mark "No" on the Natural Hazard Disclosure Statement if he or she attaches a report prepared pursuant to subdivision (c) of Section 1103.4 that verifies the property is not in the hazard zone. Nothing in this subdivision is intended to limit or abridge any existing duty of the transferor or the transferor's agents to exercise reasonable care in making a determination under this subdivision. (c) If the Federal Emergency Management Agency has issued a Letter of Map Revision confirming that a property is no longer within a special flood hazard area, then the transferor or transferor's agent may mark "No" on the Natural Hazard Disclosure Statement, even if the map has not yet been updated. The transferor or transferor's agent shall attach a copy of the Letter of Map Revision to the disclosure statement. (d) If the Federal Emergency Management Agency has issued a Letter of Map Revision confirming that a property is within a special flood hazard area and the location of the letter has been posted pursuant to subdivision (g) of Section 8589.3 of the Government Code, then the transferor or transferor's agent shall mark "Yes" on the Natural Hazard Disclosure Statement, even if the map has not yet been updated. The transferor or transferor's agent shall attach a copy of the Letter of Map Revision to the disclosure statement. (e) The disclosure required pursuant to this article may be provided by the transferor and the transferor's agent in the Local Option Real Estate Disclosure Statement described in Section 1102.6a, provided that the Local Option Real Estate Disclosure Statement includes substantially the same information and substantially the same warnings that are required by this section. (f) (1) The legal effect of a consultant's report delivered to satisfy the exemption provided by Section 1103.4 is not changed when it is accompanied by a Natural Hazard Disclosure Statement. (2) A consultant's report shall always be accompanied by a completed and signed Natural Hazard Disclosure Statement. (3) In a disclosure statement required by this section, an agent and third-party provider may cause his or her name to be preprinted in lieu of an original signature in the portions of the form reserved for signatures. The use of a preprinted name shall not change the legal effect of the acknowledgment. (g) The disclosure required by this article is only a disclosure between the transferor, the transferor's agents, and the transferee, and shall not be used by any other party, including, but not limited to, insurance companies, lenders, or governmental agencies, for any purpose. (h) In any transaction in which a transferor has accepted, prior to June 1, 1998, an offer to purchase, the transferor, or his or her agent, shall be deemed to have complied with the requirement of subdivision (a) if the transferor or agent delivers to the prospective transferee a statement that includes substantially the same information and warning as the Natural Hazard Disclosure Statement.