A new Florida law effective Tuesday requires the disclosure of a property’s flood risk to buyers by the seller
Before HB-1049, property owners and real estate agents selling homes in Florida didn’t have to tell buyers about a property’s risk for flooding.
The new law changes that, and requires sellers to disclose if a property has had any filed insurance claims for flood damage and whether federal assistance has been granted before due to flooding. The language of the law outlines a definition for what constitutes a flood.
Rose Kemp, president of the Orlando Regional Realtor Association, said laws for transparency in the homebuying process strengthen the market.
“I think that’s actually a really positive thing for the market. We can’t have enough of ensuring that people know what they’re getting into. It’s obviously the largest transaction most people make. We don’t want the American dream to turn into the American nightmare. So things like this are good,” she said.
The law does not make a specific provision requiring a seller to disclose a property’s history of past flood damage, although a buyer is required to disclose anything that could knowingly affect the value of a home. Experts say this law is a step toward more transparency.
Kemp, who has more than two decades experience in real estate, said Florida has always required what’s called a Seller Property Disclosure report but that, through the years, the document has been updated to become more detailed. This new law will be part of that, extending the flood section, so that sellers have to provide more information to consumers.
She said these changes are necessary, especially as storms continue to worsen in Florida.
“This is about being fair to any purchaser of a property to know exactly what they’re purchasing and what they’re getting into,” Kemp said. “So that they now have the ability to assess that property and understand its potential hardship in value.”
Kemp said that, perhaps most importantly, this law opens a conversation between sellers and buyers about the importance of suggesting a new owner purchase separate flood insurance.
Property insurance and flood insurance are two separate policies. For homes in X-Zones, or lowest-risk flood zones, Kemp said real estate agents will now still discuss the importance of purchasing flood insurance. As even these zones could flood sometimes, leaving uninsured homeowners in a tough position after a storm.
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