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Flood-damaged home

The Necessity for More Flood Disclosure Laws

Floods have unfortunately become a fact of life in  many coastal and low-lying areas. This becomes a problem when floods make homes uninhabitable. This displaces residents, while also impacting community businesses. Due to climate change, flooding is anticipated to increase.

Unfortunately, most homeowners don’t have flood insurance. Nor are they always informed about the likelihood of flooding in their area. In light of this, a recent article in UrbanLand magazine reports that advocates are pushing states to introduce new flood disclosure laws or to strengthen the ones that are currently on the books.

Future Homeowners and Flooding Costs

The article explained that the National Flood Insurance Program (NFIP) was launched in the late 1960s to protect property owners and reduce flood damage. From then to now, certain states created certain flood disclosure requirements for home sellers. But there isn’t federal legislation to disclose either a property’s history of flood damage or even flood risk.

But a 2022 study by the Natural Resources Defense Council (NRDC) covered how many homes had flooded and the associated homeowner cost. The report was authored by Milliman and indicated that homeowner cost for homes without a previous flooding history was $61. That cost ratcheted up to $1,200 on homes that had previously flooded and had sustained flood damage. “If you don’t know your home has been previously flooded, you’re taking on huge financial risk,” Larry Baeder, a data scientist at Milliman, told UrbanLand. “You have no clue you potentially have this cost down the road.”

Which States and Which Laws?

In 2018, NRDC undertook another study in partnership with Columbia Law School’s Sabin Center. This review involved a 50-state analysis concerning which had good disclosure laws, and which needed improvement. The result was that 21 states had absolutely no disclosure requirements. The remainder had a “hodgepodge” of requirements.

The UrbanLand article pointed out that Missouri is one state that doesn’t have flooding disclosure requirements – but homeowners are required to disclose whether there had ever been a meth lab on the premises. Meanwhile, Louisiana has a very detailed and specific flood risk disclosure law.

On the Industry Side

The UrbanLand article said that industry organizations like the National Association of Realtors (NAR) believes that the issue should go beyond new legislation. NAR Senior Policy Representative Austin Perez told UrbanLand that current disclosures are more on the seller side. But the buyer should conduct due diligence as well. The bulk of such information comes from flood maps issued by the Federal Emergency Management Agency, or FEMA. But industry experts note that the maps are often outdated.

Perez said that FEMA should make it easier for potential home buyers to make flood data easier to obtain, and to ensure flood maps are updated more frequently. “We want disclosure laws and we also want effective tools for consumers,” he added.


Inside The Story

Columbia Law School -- Sabin Center for Climate ChangeMillimanNational Association of RealtorsNational Resources Defense CouncilUrbanLand Magazine

About Amy Wolff Sorter

I love content. I love writing it, visualizing it, and manipulating it to fit into different formats. I have years of experience in working with content, both as creator and editor. The content I create and edit provides assistance with many goals, ranging from lead generation, to developing street cred through well-timed thought-leadership pieces. Content skills include, but aren't limited to, articles and blogs, e-mails, promotional collateral, infographics, e-books and white papers, website copy and more.

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