It’s a tough nut to crack, but it shouldn’t be. Real estate buyers should have a right to full disclosure of the risk sea level rise flooding (or any flooding for that matter) poses to a home before they submit an offer. But, in reality, with no effective national disclosure policy and a hodge-podge of mostly toothless state laws, real estate buyers are too often left unaware of the risk until floodwaters show up in their neighborhood or at their doors.
This point was hit home in a recent article titled “Undisclosed: Most Homebuyers And Renters Aren’t Warned About Flood or Wildfire Risk” published on National Public Radio’s website. Reporters Ryan Kellman, Rebecca Hersher, and Lauren Sommer used real-life experiences of people living in flood and fire prone areas to explain how buyers and even long-time owners have faced damaged or destroyed homes due to a threat they didn’t know about or didn’t fully appreciate. Reading their article gives you a real sense of the human cost of America’s failure to disclose a property’s risk of falling to natural disasters.
The problems examined in the NPR article have been explored in great detail on this website and in our book “7 Sea Level Rise Real Estate Questions for Buyers, Sellers, Owners & Real Estate Agents”. Essentially, buyers are left at a disadvantage when purchasing property in a flood-prone area because: 1) There is no federal law that mandates seller disclosure of sea level rise flooding risk; 2) State laws, in most cases, don’t require either the disclosure of any and/or enough information for buyers to make an informed decision before submitting an offer; 3) The people buyers count on for the information — including sellers, real estate agents, mortgage providers and insurers — aren’t required to warn buyers that they’re purchasing a home that is subject to or could soon be subject to sea level rise flooding; and 4) The Federal Emergency Management Agency (FEMA) produces maps that identify flood zones that are notoriously out of date and do not take into consideration sea level rise flooding. This leaves many buyers ill-informed when making decisions that will impact their lives, livelihoods and financial futures.
The risk to homeowners and buyers purchasing property in coastal areas can’t be overstated. In many coastal communities, neighborhoods, roads and properties are already being inundated by sea level rise flooding. As the NPR article states, many homeowners have inadequate insurance that will fall short of making them whole should they experience flooding. In some areas repeated flooding is so bad states are setting aside millions of dollars to buy-out and demolish homes that repeatedly flood to stop the expense of the rebuild-destruction cycle.
Taxpayers, too, pay a price for the current situation. When properties flood and the federal government pays out billions of dollars for repairs the funds ultimately come out of their pockets.
The only fair solution to this problem is the passage of tougher national and state flood disclosure laws. Alice Hill, who led disaster planning efforts at the President Barack Obama’s National Security Council, told NPR that the federal government should take responsibility for giving Americans information about flood risk so they can make informed decisions.
Until that day comes, buyers and owners need to practice due diligence and determine a property’s flood risk to protect themselves from the expense and inconvenience of a flooding event. This entails putting on their detective’s hat and taking steps such as studying FEMA flood maps and asking residents, local real estate agents, mortgage providers, insurers, home inspectors and government planning officials if they’re aware of flooding in and around the property of interest. Researching media reports can also be of value. Throughout the fact-gathering process, buyers and property owners must fight the urge to rely on a single source for information as there are shortcomings to all of them.
A final issue to factor in when evaluating real estate opportunities in coastal communities is future sea level rise projections. Properties that don’t flood today, might flood over the course of a 30-year mortgage as sea level continues to rise.