Under Florida case law, a seller of a home must disclose to the buyer all known facts that materially affect the value of the property and that are not readily observable or known to the buyer.
Typically, a buyer in Florida is provided with a Seller’s Property Disclosure Form. It covers a variety of property conditions and risks, including: structures, appliances, termites, water intrusion, flooding drainage, sinkholes, lead paint, mold, asbestos, roof condition, and zoning issues.
These are important, but, as the form itself states, the seller may declare that he or she does not have any information on some or all of these risks and, the disclosure “is not a guaranty or warranty of any kind.”
According to a recent study by the Natural Resources Defense Council, Florida is one of 21 states where there are “no statutory or regulatory requirements for a seller to disclose a property’s flood risks or past flood damages to a potential buyer. The other 29 states have varying degrees of disclosure requirements. This hodgepodge of state and local policies hinders buyers from making fully informed decisions.”
The Florida seller disclosure form also, and properly, states that: “it is not a substitute for any inspections, warranties or professional advice” that the buyer may wish to obtain.
In Florida, as in most of the world, floods represent the biggest annual risk of damage and loss to property. Homebuyers need to understand their flood risks and determine if they need flood insurance and in what amounts.
However, many property owners believe that banks or insurance brokers will tell them what FEMA flood zone they’re in and whether they should buy insurance. This would be a big mistake.
Of the more than 200,000 Texas homes damaged in Hurricane Harvey, 75 percent were not in the FEMA 100-year flood plain. A great majority of these homeowners did not buy flood insurance because their mortgage company did not require it.
It is very important for homebuyers to understand this fact: FEMA maps don’t tell the whole story about flood risks. They are primarily an underwriting tool for the government-owned National Flood Insurance Program (NFIP).
FEMA maps have failed spectacularly in some cases. This is especially true in Florida, where storm surge and tidal flood risks are prevalent.
First, they do not include the NOAA storm surge heights or the National Hurricane Center storm-return frequencies. Almost always, NOAA and the hurricane center predict higher surge and greater frequencies than FEMA maps. So, shouldn’t homebuyers be made aware of both the FEMA predictions and the NOAA predictions?
Before Hurricane Michael struck Mexico Beachin 2018, coastal residents thought that they were safe residing in a FEMA X zone. The storm wiped their homes off the map.
In the case of king tides and tidal flood risks, these also are not covered by FEMA maps. There are areas of Palm Beach, Broward, Miami-Dade and Monroe counties that have serious king tide flooding right now.
Are prospective homebuyers being told about this type of flooding? Generally, no.
No one in Florida can purchase a home with a mortgage without a title report and title insurance. But, who really owns the lands that are covered or will be covered with sea water during the mortgage cycle by tidal flooding? And, are title insurance companies taking king tide flooding into account?
According to a recent article in Bloomberg news: “For centuries, a body of law called the public trust doctrine has stipulated that, when it comes to coastal property, anything below the average high-tide line is owned by the government for the use and benefit of the public. Those rules also cover what happens when the high-tide line moves…Around the country, the combination of rising seas and political stalemate will eventually force courts to intervene.”
How will those court fights unfold?
“We’re going to find out!” said Peter Byrne, faculty director of Georgetown University’s Environmental Law and Policy Program, according to the article.
So, from hurricane storm surges, to tidal flooding, to title ownership issues, prospective homebuyers in Florida and most other coastal states need more and better flood risk information before signing that sales contract.
Albert J. Slap is president of Coastal Risk Consulting, which is a flood, natural hazard and climate change impact risk assessment tech company in Boca Raton, FLa. Go to www.floodscores.com.
“The Invading Sea” is a collaboration of four South Florida media organizations — the South Florida Sun Sentinel, Miami Herald, Palm Beach Post and WLRN Public Media.