CHAPEL HILL, N.C.—The Southern Environmental Law Center has petitioned the North Carolina Real Estate Commission to require sellers to disclose to potential buyers information about past flood damages on behalf of Natural Resources Defense Council, North Carolina Justice Center, MDC, North Carolina Disaster Recovery and Resiliency School, Robeson County Church and Community Center, and NC Field, according to a news release from the center.
Providing this information to buyers would allow them to make fully informed decisions about the home they choose to purchase, the risk of flooding at a property, and investments they may want to make in order to address the risk of flooding.
Currently, the Real Estate Commission only requires that property sellers disclose whether a home is in a floodplain or subject to a flood hazard, the release stated. However, this vague language falls short of best practices for flood hazard disclosure because it does not share the information necessary for buyers to know a property’s flood history, including actual damages, costs of flood insurance, or whether previous owners ever received federal disaster assistance, in which case flood insurance is mandatory for all subsequent owners of the property. Other coastal states that face similar exposure to floods and hurricanes, like Louisiana and Texas, already ensure that homebuyers are given information about a home’s flood history before purchase.
The Residential Property Disclosure Act requires the North Carolina Real Estate Commission to develop a standard disclosure form that must be used in residential real estate transactions. The petition for rulemaking to the North Carolina Real Estate Commission requests that it amend the mandatory disclosure form to require more explicit information about flood history and risk, adding much needed transparency to real estate transactions.
A recent study found that unsuspecting homebuyers in North Carolina could incur tens of thousands of dollars in unanticipated damages over the lifetime of their mortgage, due to the state’s lax disclosure requirements. An analysis by NRDC found that North Carolina has one of the weaker disclosure policies in the nation when it comes to flooding.