California Bar Journal
OFFICIAL PUBLICATION OF THE STATE BAR OF CALIFORNIA - AUGUST 1999
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MCLE SELF-STUDY

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Self-Assessment Test
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Answer the following questions after reading the MCLE article on natural hazard disclosures in property sales. Use the answer form provided to send the test, along with a $20 processing fee, to the State Bar. Please allow at least eight weeks for MCLE certificates to reach you in the mail.

1. New subdivision sales are not exempt from the natural hazard disclosure requirements.

2. A seller must have actual knowledge that the property is located in a high fire severity zone before any duty to disclose arises.

3. Providing a buyer with a completed Natural Hazard Disclosure Statement satisfies any disclosure duty the seller may have with respect to the hazard under any other provision of law.

4. The Natural Hazard Disclosure Statement must be used in residential resale transactions.

5. Failure to make the required disclosure can subject the seller or the seller's agent to reimburse the buyer for any actual damages sustained not in excess of $500.

6. A local option disclosure form can be used in place of the Natural Hazard Disclosure Statement provided the form has been certified by the Secretary of State's office.

7. If a map is not sufficiently accurate to show whether a property is located in a FEMA flood zone A, the seller must assume it is in the area and make the disclosure.

8. The natural hazard disclosure legislation established six new disclosure requirements.

9. The seller of a parcel to be used for industrial purposes is subject to the statutory natural hazards disclosure requirements.

10. The seller's agent has the primary responsibility to disclose that property is located in a dam failure inundation area, seismic hazard zone, earthquake fault zone and FEMA Zone A.

11. The seller of a commercial building located in a seismic hazard area is not required to use the Natural Hazard Disclosure Statement to make the disclosure.

12. A seller who provides a buyer with a Transfer Disclosure Statement need not provide the buyer with the Natural Hazard Disclosure Statement.

13. Sellers of property within a natural hazard area that are not required to use the Natural Hazard Disclosure Statement must include in the disclosure a warning that the buyer's ability to get insurance may be limited.

14. A seller who relies on an erroneous report prepared by a qualified expert that the property is not in a high fire severity zone may be insulated from liability without regard to the seller's actual knowledge.

15. Dam failure inundation areas consist of areas subject to potential flooding in the event of a total or partial failure of a dam that would result in significant property damage.

16. If the map is not sufficiently accurate that a reasonable person can determine whether the property is within a high fire severity zone, the seller may mark "no" on the Natural Hazard Disclosure Statement if the seller has an expert's report verifying that the property is not in the zone.

17. If property in the first phase of a new subdivision is not within a natural hazard area, the entire subdivision is exempt from any disclosure requirement.

18. Absent actual knowledge, no duty to disclose arises unless the local jurisdiction has been provided with a map showing the property is in an earthquake fault zone and notice of the location of the map has been posted in the offices of the county's recorder, assessor and planning agency.

19. A seller is not personally liable for actual damages for failing to disclose the property was in a high fire severity zone if the seller had no actual knowledge but the seller's agent had actual knowledge.

20. If the seller fails to make a required disclosure, the buyer may bring an action to rescind the transaction, or, in the alternative, an action for damages.

CERTIFICATION

This activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour.

The State Bar of California certifies that this activity conforms to the standards for approved education activities prescribed by the rules and regulations of the State Bar of California governing minimum continuing legal education.