A Natural Hazard Disclosure (NHD), is a disclosure that is required when purchasing a California home. The report shows the new buyer whether the home is located in a hazard zone. Hazard zones are defined as earthquake faults, fire, dam inundation, seismic hazard and flood zones. As well as defining the hazard zones it will also determine if the Bay Area home is subject to a Mello Roos Tax.
What is Mello Roos Tax?
According to the California Tax Data, Mello-Roos is a form of financing that can be used by cities, counties, and special districts (such as school districts). Mello-Roos Community Facilities Districts (referred to as “CFDs”) raise money through special taxes that must be approved by 2/3rds of the voters within the district. A CFD is formed to finance major improvements and services within the district which might include schools, roads, libraries, police and fire protection services, or ambulance services. The taxes are secured by a continuing lien and are levied annually against property within the district