By Mary C. Brockman, Associate Attorney
As of October 1, 2024, sellers will be required to provide a flood disclosure summary to buyers either before or at the time the sales contract is executed. This new regulation aims to enhance transparency and ensure that prospective homeowners are fully informed about potential flood risks associated with their new property.
What You Need to Know About the Flood Disclosure Summary
The flood disclosure summary includes several key components designed to inform buyers about the specifics of flood risk and insurance coverage:
1. Importance of Flood Insurance
Homeowners’ insurance policies do not include coverage for damage resulting from floods; therefore, the disclosure must include language indicating as such. Additionally, there must be well a statement encouraging the Buyer to discuss purchasing separate flood insurance coverage or at least discuss their options with their insurance agent.
2. Seller’s Flood Claim History
Sellers will need to indicate whether they have filed a claim with any insurance provider related to flood damage on the property, including, but not limited to, a claim with the National Flood Insurance Program. This information can provide valuable insight into the property’s history and potential vulnerabilities.
3. Federal Assistance for Flood Damage
The seller must also disclose if they have received federal assistance for flood damage, such as help from the Federal Emergency Management Agency (FEMA). This aspect can be a significant indicator of past flood issues and how they were addressed.
Definitions
For the purposes of disclosure, flooding is defined as a general or temporary condition of partial or complete inundation of the property caused by:
• Overflow of inland or tidal waters
• The unusual or rapid accumulation of runoff or surface waters from established water sources, such as rivers, streams, or drainage ditches
• Sustained periods of standing water resulting from rainfall
Implications for Buyers
As a buyer, be sure to review the flood disclosure summary carefully. It’s an essential step in safeguarding your investment and ensuring you are prepared for any potential flood-related issues in the future. Understanding these new flood disclosure requirements will empower you as a buyer to make informed decisions about your potential new home.
Implications for Sellers
As a seller, you need to make sure that you accurately include all required disclosure information either before or at the time of contract execution in order to protect yourself from potential liability.
Contact Woodward, Pires, & Lombardo, P.A. Today
To discuss how this new Flood Disclosure regulation may impact you, contact us via phone or email to schedule a consultation.
About the Author
Mary C. Brockman is an associate attorney at the Marco Island location of Woodward, Pires & Lombardo, P.A. Mary’s law practice focuses on pro-
Woodward, Pires, & Lombardo, P.A.
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