In the aftermath of Hurricane Helene, Florida state lawmakers have passed a new flood disclosure statute for real estate transactions. With many homes destroyed by the recent floods from hurricanes such as Milton, Helene, and Ian, the new law is meant to help inform potential buyers of a property’s flood risk. This change brings more transparency to the transaction, making buyers aware of any dangers before making purchasing decisions. In this blog, we’ll explore what the new law consists of and how it could affect both buyers and sellers in the Sunshine State.
Understanding Florida’s New Flood Disclosure Requirements: Key Information for Buyers and Sellers
On October 1st, 2024, Florida introduced a new law that requires sellers to make disclosures about their property’s flood history.
Flooding is defined as any of the following:
- Overflow of inland or tidal waters
- Build-up of surface water
- From established water sources such as rainfall, rivers, streams, ditches, etc.
Under the new statute, sellers must communicate whether they have filed insurance claims for flood damage or received any federal assistance related to flooding. These simple questions help give buyers awareness of a property’s risk of future flooding, ensuring they are better informed before making any decisions. The law applies to all property sales and must be provided to buyers for all transactions that are entered into beginning on October 1, 2024. It is important to note that the statute defines flooding broadly to include virtually any water penetration into a home from any source. It is important to remember the intent of this new law- allow buyers to make more informed decisions before submitting an offer to purchase or entering negotiations.
On this important topic of flooding and disclosure, remember that The Federal Emergency Management Agency (FEMA) also plays a role by identifying homes as “severe repetitive loss properties.” These are homes that have flooded at least twice with damage equal to or exceeding the property’s value. Florida is home to more than three thousand properties in this category nationwide. However, FEMA only shares past flood history with property owners who hold active flood insurance policies, leaving buyers without those policies in the dark unless sellers disclose this information.
It’s also important to note that typical homeowners insurance policies do not cover flood damage. The new disclosure requirement is a reminder for buyers to consider separate flood insurance coverage to protect their property.
Overview
In summary, Florida’s new flood disclosure regulations offer protection and transparency for homebuyers, ensuring they are informed about a property’s flood history. Sellers must now disclose past flood-related insurance claims and assistance before any contract is signed, which helps buyers make more informed decisions. Additionally, as standard homeowners’ insurance often doesn’t include flood damage, buyers are encouraged to get separate flood insurance for that reason. This law will strengthen buyer protection in the state of Florida.