Last fall the California Legislature passed into law an amendment to existing residential housing disclosure laws that mandates full disclosure in leasing or rental contracts of any known flooding risks.
This amendment was passed in response to the high level of flooding experienced by many California properties during the heavy rains of the 2017 winter season. San Jose, in particular, had unexpectedly heavy flooding along Coyote Creek which caused significant property loss among both owners and renters. Renters, in particular, tended not to have insurance against flood damage and suffered monumental financial loss.
Requirement to Disclose Flood Hazard Information
This amendment to Sections 8589.3 and 8589.4 of the Government Code “requires a person acting as an agent for a transferor of real property, or the transferor if he or she is acting without an agent, who has actual knowledge that the property is located within a special flood hazard area or an area of potential flooding to disclose that fact to a prospective transferee.”
This new disclosure requirement applies to every lease or rental agreement for residential property entered into, on or after July 1, 2018.
The landlord or their representative (a property management firm) who offers the property for rent must disclose to the tenant specific information pertaining to the risk of flooding.
Here is the language of the law describing what needs disclosing:
“In every lease or rental agreement for residential property entered into on or after July 1, 2018, the owner or person offering the property for rent shall disclose to a tenant, in no smaller than eight-point type, the following:
- That the property is located in a special flood hazard area or an area of potential flooding, if the owner has actual knowledge of that fact. For purposes of this section, “actual knowledge” includes the following:
- The owner has received written notice from any public agency stating that the property is located in a special flood hazard area or an area of potential flooding.
- The property is located in an area in which the owner’s mortgage holder requires the owner to carry flood insurance.
- The owner currently carries flood insurance.
- That the tenant may obtain information about hazards, including flood hazards, that may affect the property from the Internet Website of the Office of Emergency Services. The disclosure shall include the Internet Website address for the My Hazards tool maintained by the office.
- That the owner’s insurance does not cover the loss of the tenant’s personal possessions and it is recommended that the tenant consider purchasing renter’s insurance and flood insurance to insure his or her possessions from loss due to fire, flood, or other risk of loss.
- That the owner is not required to provide additional information concerning the flood hazards to the property and that the information provided pursuant to this section is deemed adequate to inform the tenant.
Contact HomeGuard Inc, a Company that Provides Bay Area and Sacramento NHD Reports
HomeGuard’s Natural Hazard Disclosure Report provides the required flood information for $59. You can also purchase the Natural Hazard Disclosure & Tax Report for $89. Call the office at (855) 331-1900 or order online. We have customer service representatives ready to assist you.