North Carolina, Florida Home Sellers Facing New Flood Disclosure Requirements

As of this week, home sellers in North Carolina must now disclose previous flood damage to properties. And come Oct. 1, Floridians must make similar disclosures, potentially boosting the demand for flood insurance.

The North Carolina Real Estate Commission this spring finalized changes to the residential property disclosure statement form that property owners are required to complete before a purchase offer is made.

The rule took effect July 1. The six-page form, seen here, asks sellers to report if the property has experienced damage to due flooding, if a flood insurance claim has ever been filed, and if the site is currently covered by flood insurance.

The Real Estate Commission approved the change in May with little fanfare, according to news reports. Advocates said it’s part of a growing, nationwide recognition that flooding is only going to get worse in many parts of the country.

In Florida, House Bill 1049 was approved by lawmakers in March and was signed by the governor in May. Starting Oct. 1, home sellers must report on a form to prospective buyers that homeowners’ insurance does not cover flood damage; if the seller has ever filed a flood claim; and if the seller has ever received federal assistance for flood damage at the property.

North Carolina and Florida are now among a number of states that require full disclosure on flood risks. The National Resource Defense Council tracks disclosure requirements and reported that as of last fall, South Carolina, Tennessee, Mississippi, Louisiana, Texas, Oklahoma, New Jersey and New York had some of the strongest disclosure requirements. Some 22 states, including Alabama, Georgia, West Virginia and Virginia, had zero or inadequate disclosure laws as of last August, the group noted.

The changes in Florida and North Carolina come as the Federal Emergency Management Agency recently announced updates to flood risk maps, putting hundreds of thousands of more properties in hazard areas. If those properties hold mortgages, they will likely be required to purchase flood insurance.

Topics Florida Flood North Carolina