In 21 states, home sellers are not required by law to disclose to buyers whether their home has ever flooded or whether they will be required to purchase flood insurance, according to an analysis by the Natural Resources Defense Council (NRDC) and Columbia University’s Sabin Center for Climate Change Law. The findings are presented in a flood disclosure map of state real estate laws.
“In nearly half the states the deck is stacked against home buyers because sellers get a pass on revealing a property’s flood history,” said Joel Scata, attorney with NRDC. “With flood risks rising throughout the country, this is a problem that Congress has the ability to fix.”
NRDC is an international not-for-profit organization addressing environmental issues that is backed by lawyers, advocates, officials, scientists and corporations.
According to the group’s research, states with the “worst disclosure laws” include Florida, Missouri, New York and New Jersey. Missouri has no provisions requiring a seller to tell a buyer whether a house has ever flooded. New York State has disclosure provisions, but allows sellers to pay a paltry $500 to opt out of informing buyers about flood damages.
The states with the best disclosure laws are Oklahoma, Louisiana and Mississippi, according to the NRDC analysis.
Twenty-nine states and Washington, D.C. have an array of disclosure requirements, most of which still fail to give a buyer complete knowledge of past flood damage and future flood risks.
Noting that more than 41 million Americans live in flood zones, NRDC is advocating for greater disclosure of flood risks during real estate transactions to encourage prospective homeowners to be more risk adverse when deciding where to live, and whether to take actions to minimize their risks if they do decide to purchase a flood-prone home.
However, such disclosure provisions should not be limited to disclosure requirements imposed on sellers. According to the group, the National Flood Insurance Program (NFIP) should also share information that is available. “Current home owners should have a right-to-know about their property’s past history of flood insurance coverage, damage claims paid, and whether there is a legal requirement to purchase flood insurance because of past owners receipt of federal disaster aid,” the group said.
Additional Resource: Home Buyers Face Stacked Decks To Learn of Past Floods
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