What is a Hazard Disclosure?

A hazard disclosure is a statement discussing known hazards in or around a property. In many regions, a hazard disclosure must be provided to the purchaser of a piece of real estate or to a renter before he or she becomes obligated under a contract to take possession of the property. This is designed to ensure that people have an opportunity to opt out of a purchase or rental if they are concerned about the hazards discussed in the hazard disclosure.

A common example of something discussed on a hazard disclosure is natural hazards. If a home is in a flood zone, a region prone to wildfires, or an area known for seismic activity, this must be stated in the hazard disclosure. Other issues can include the presence of lead paint, proximity to a contaminated site, and other potential hazards which may be of concern.

While people are obligated by law to disclose known hazards, they are not necessarily obligated to test for hazards. In other words, if a home sits in a zone known for natural hazards, the owner is required to mention this, but the property owner is not required to test for things like radon or asbestos. Hazard disclosures also usually include a list of things which can reasonably assumed to be hazards, even if they haven't been tested: a home built prior to 1978, for example, must include a disclosure that it may contain lead paint, and information about pre-1978 paints.

Laws about hazard disclosures can get complex. When people put a home on the market, they should take time to talk with their real estate agent about their obligations under the law, to ensure that they comply. Failure to comply could be grounds for a lawsuit, or could allow people to back out of a sale contract without penalty. Property owners who intend to rent should consult local officials or property management companies to learn about their obligations; many government agencies concerned with housing provide booklets discussing rights and obligations for landlords and tenants which provide information about hazard disclosures.

The language on a hazard disclosure form also needs to be worded carefully. Fill in the blank legal forms are available from some legal publishing companies, and people can also hire a company to draw up a hazard disclosure form appropriate for their property. When the form is prepared by someone else, it is advisable to review it carefully to make sure that it is accurate.