California’s fire warnings on homes could be model for climate risks

Sellers of older homes in high-risk wildfire areas of California must now disclose what they’ve done to address their home’s vulnerabilities in addition to the risks from fire itself.

The disclosure requirement is the first to focus on a property’s ability to survive a catastrophe and it could become a model for other areas coping with the vulnerability to effects of climate change. About three dozen states require some flood-risk disclosure, but California is the only one that mandates home sellers disclose wildfire hazards.

Revealing climate risks pushes home prices lower, noted a housing analyst quoted in a Bloomberg report. On the other hand, buyers are willing to pay more for safer properties, so sellers may be prompted to bolster their homes’ resilience to climate risks.

The new California rule requires sellers to list features that endanger a house, including combustible roofs, uncovered vents, single-pane windows, and vegetation within five feet of a building. Disclosures showing that the seller has remedied such threats could help buyers obtain lower cost homeowners’ insurance.