Question for Kathy: NHD Companies will no longer be able to provide the C.L.U.E. Reports

Q. Two questions regarding the Natural Hazards Disclosure (NHD) Reports:

1) I recently heard that third party companies that provide NHD Reports will no longer provide C.L.U.E. Reports; is that true?
2) When representing a Buyer, am I required to sign the NHD?

A. Part 1: You are correct; third party NHD providers will no longer be able to provide the C.L.U.E.® Home Seller’s Disclosure Report. The reason being LexisNexis, the provider of the of the Report discontinued providing the information through NHD companies.

At this time only the property owner will be able to request the C.L.U.E.® Home Sellers Disclosure Report. Remember; the report itself is not statutorily prescribed under the law in California. In accordance with the statute the Seller is only obligated to disclose and explain, based on their knowledge, any insurance claim for the past five years.

In the event a Seller agrees to be contractually bound to secure a C.L.U.E.® report, after November 30, 2015 it must be ordered/purchased through LexisNexis.

Tip: Buyers are well served when they consult early on with their insurance broker/agent with respect to their insurability and that of the property. This practice can avoid the unnecessary expense of Buyer Investigations should it be revealed that the Buyer or the Property are not insurable.

Part 2: As a Buyer’s agent you are not required to sign the NHD and I would advise against doing so. The law is very clear in this regard; California Civil Code Section 1103.2 only requires the signatures of the Seller, Seller’s agent and the third party disclosure company (if one is used; which is nearly always the case).

Questions? Email them

The foregoing is not to be construed as legal advice. It is for the purposes of real estate brokerage education only.

Kathy Mehringer
Regional Director of Risk Management & Education
Broker Associate
CalBRE # 00625769
9560 Wilshire Blvd, Ste 200
Beverly Hills, CA 90212