North Carolina Real Estate Commission Petitioned to Disclose Flood History
CHAPEL HILL, N.C.—The Southern Environmental Law Center today petitioned the North Carolina Real Estate Commission to require sellers to disclose to potential buyers information about past flood damages on behalf of NRDC (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. 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.
“It’s common sense to give North Carolinians the necessary information to know if they will need flood insurance before buying a property,” said Brooks Rainey-Pearson, senior attorney, Southern Environmental Law Center, which represents the organizations before the commission. “The Real Estate Commission can help level the playing field for homebuyers in North Carolina and make sure that they know about the flood risks that come with a house.”
Currently, the Real Estate Commission only requires that property sellers disclose whether a home is in a floodplain or subject to a flood hazard. 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.
“A home that is flooded once is likely to get hit again, and buyers should have the right to know that information given how costly flooding can be for a homeowner,” said Joel Scata, senior attorney, NRDC. “Buying a home is likely the biggest investment in someone’s life – so it’s unfair for them to not have the information they need to make the best possible choice.”
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. Today’s 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. A 2022 FEMA analysis also found North Carolina’s disclosure requirements are severely lacking. These proposed disclosures enjoy bipartisan support, with more than 80% of North Carolinians across the political spectrum in favor of strengthening the state’s disclosure requirements to ensure that homebuyers have sufficient information about a property’s flood risks.
“Flood disclosures are vital in inland communities where potential buyers may not even think to ask about the real and significant risk of flooding that comes from rain generated by a hurricane,” said Brittany Love, director of Systemic Programming at the Robeson County Church and Community Center in Lumberton, N.C.
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