Has the house you are buying ever been flooded? An Undisclosed Risk Can Cost You | WFAE 90.7

In North Carolina and many other states, sellers don’t have to tell buyers if a home has ever been damaged by flooding. A new study indicates that lack of disclosure can lead to unexpected and costly future damage.

The Natural Resources Defense Council report examined undisclosed flood risk in real estate transactions in New Jersey, New York and North Carolina. They are among the majority of US states that the council says lack adequate flood disclosure laws.

“They all really leave homebuyers in the dark about the risks you might face buying a previously flooded home,” said Joel Scata, an NRDC attorney.

Scata said a home that has flooded once is likely to flood again.

“Buyers who unwittingly purchase a previously flooded home can expect to pay tens of thousands of dollars in damages over the course of their mortgage,” Scata said.

He said the risk is heightened in today’s real estate market where there is pressure to close deals quickly, sometimes without inspection. And while an inspection can detect water damage, it won’t tell you if a home is likely to flood again.

“Homebuyers who unwittingly purchase a previously flooded home can expect to pay tens of thousands of dollars in damages over the course of their mortgage.”

— Joel Scata, lawyer at the NRDC

The report says more than 290,000 single-family homes in North Carolina sustained flood damage — both on the coast and near inland lakes and waterways. Last year, more than 13,000 of them were sold in the state, with total past damage estimated at $16 million.

And then there’s climate change, which is expected to increase future flood damage due to rising seas and more intense storms. The report considers three scenarios, including one where we will not reduce greenhouse gas emissions fast enough.

“In North Carolina, in the worst-case climate scenario, someone can expect to pay about $61,000 over 30 years,” Scata said.

The NRDC and other environmental groups are calling on states to pass stricter disclosure laws.

“The NRDC advocates that homebuyers in North Carolina have the right to know their flood risk. And we seek to ensure that these laws are up to date,” Scata said.

Sierra Weaver directs the Coastal Wetlands Program at the Southern Environmental Law Center. She said current law in North Carolina provides inadequate protections for buyers.

The NRDC and other environmental groups are calling on states to pass stricter disclosure laws.

“North Carolina requires disclosure of ‘actual knowledge’ of flood risk and location within a federally designated flood hazard zone. So that’s sort of the bare minimum that appears on a map, which we know is horribly outdated,” Weaver said.

And these federal flood maps don’t take climate change into account.

“So someone can come in and say, ‘I’ve only owned this house for six months. In fact, they weren’t there when a flood happened. And the next owner gets no disclosure from that owner,” Weaver said. “So at the end of the day, we just don’t have enough specificity and enough clarity to make sure those risks are disclosed to new buyers.”

Until the state improves disclosure rules, Scata said it’s important to know what questions to ask sellers. They understand:

  • Has a structure ever been damaged by a flood?
  • How often and what was this damage?
  • Has the seller ever filed a flood damage claim on the property?
  • Was flood insurance required on the property?

“As a buyer, one of the best things to do is just ask the seller questions, because the seller can’t lie to you,” Scata said.

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