With sea level rising, real estate agents face a growing risk of lawsuits from buyers and sellers regarding the disclosure of flood-related facts about a property of interest.
The National Association of Realtors ™ (NAR) commissioned a study of flood-related lawsuits filed between 2000-2020. According to an article in the association’s magazine, researcher found 4,500 flood-related lawsuits (not all sea level rise related, of course) were filed. Of those, 61 lawsuits “specifically involved a real estate professional or brokerage.” Furthermore, six resulted in “significant verdicts and awards against the real estate licensee and brokerage.”
NAR said most of the cases “were brought by buyers against seller’s agents or brokerages and alleged fraud, breach of fiduciary duty, negligence, and intentional misrepresentation or omission.”
As coastal flooding becomes more frequent, more damaging, and impacts more and more properties and neighborhoods, real estate agents are going to have to become more aware flooding is in their communities. They’re also going to have to consult their brokers and real estate attorneys for a clear understanding of what they’re required to disclose according to their state’s disclosure laws and what sellers themselves have to tell buyers. Failure to meet the requirements puts their clients and their own financial futures and careers in jeopardy.
Please read “7 Sea Level Rise Real Estate Questions for Buyers, Sellers, Owners & Real Estate Agents” for more information about this issue and many more.