{"id":1516,"date":"2021-07-07T10:00:11","date_gmt":"2021-07-07T14:00:11","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=1516"},"modified":"2024-04-25T23:20:00","modified_gmt":"2024-04-26T03:20:00","slug":"breaking-legal-news-in-hawaii-home-sellers-must-now-disclose-sea-level-risks","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/breaking-legal-news-in-hawaii-home-sellers-must-now-disclose-sea-level-risks\/","title":{"rendered":"Breaking Legal News in Hawaii: Home Sellers Must Now Disclose Sea Level Risks"},"content":{"rendered":"\n
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It\u2019s a sign of the coming times. Hawaii\u2019s Senate Bill 474 has\namended the state\u2019s flood hazard disclosure rules for residential real estate.\nDisclosures now must include sea level rise exposure, in alignment with hydraulic\nand hydrological data from the Hawaii Climate Change Mitigation and\nAdaptation Commission.<\/p>\n\n\n\n

Gov. David Ige signed the bill on July 2, 2021. One of the\nother bills signed on the same day was House Bill 243, which directs state\nagencies to take sea level rise into account in infrastructure plans. <\/p>\n\n\n\n

These bills are among the latest steps Hawaii has taken to\nmeet the goals of its 2050 Sustainability Plan and the capacity of future\ngenerations to thrive.<\/p>\n\n\n\n\n\n\n\n

A Material Fact Impacting Property Values<\/strong><\/h2>\n\n\n\n

Real estate purchases are considered, by most buyers, as\nchannels for income or rising equity. That assumption can be eroded by climate\nchange. Certainly, it is being eroded in Hawaii, where the sea is expected to\nrise more than three feet from its 2019 level by 2050. People who take out a\n30-year mortgage today will face that date within the life of their loan. And\nthat rise will take place inch by inch, every year.<\/p>\n\n\n\n

The state\u2019s Climate Change Mitigation and Adaptation Commission\nhas been working since 2017 to label the areas most vulnerable to change, and\nconnect the data with the county tax parcel databases. According to the\nCommission, property values in these vulnerable areas will experience gradually\nworsening impacts. The Hawaii Association of Realtors agrees that this is a\nmaterial fact for property sellers to disclose. <\/p>\n\n\n\n

What about other states? Even as rising seas erode the\ncoasts, they push floodwaters inland. This is the case not just in Hawaii, but\nacross the continental United States. <\/p>\n\n\n\n

For property disclosures related to flood hazards in general, the National Association of REALTORS<\/a>\u00ae keeps a running survey covering the entire country. So far, most U.S. residents are unable to request a flood history for their properties, or for homes they might want to buy. Many people aren\u2019t even aware of the issue. But that will change. Rising inland waterways<\/a> indicate that millions of households will soon be dealing with serial flood events. Is Hawaii charting a path for others to follow?<\/p>\n\n\n\n

The Need for Greater Transparency<\/strong><\/h2>\n\n\n\n

As\u00a0climate disruptions continue, the Natural Resources Defense Council (NRDC) points out<\/a>, \u201cthe need for greater transparency of flood risks will become only more imperative.\u201d Temperatures of the world\u2019s lakes are rising .61\u00b0F per decade. It seems the Great Lakes are rising<\/a> with them. Owners of lakeshore properties are concerned about the strengthening storms. Weather events are known to become harsher and more frequent year after year on account of human-driven climate disruptions. <\/p>\n\n\n\n

The southern U.S. housing market<\/a> is demonstrably affected by climate-related flooding, writes the NRDC. Research by Prof. Jesse M. Keenan of the Tulane University School of Architecture shows that banks are insisting on down payments as high as 40% to offset the risk of underwriting coastal homes. Then the banks sell the loans to Fannie Mae and Freddie Mac. Sellers are lowering their prices to persuade buyers to put the high payments down. <\/p>\n\n\n\n

What can halt or slow the devaluation spiral? ReBuild NC is one answer. Created by the North Carolina Office of Recovery and Resiliency, the initiative has identified \u201cBuyout Zones\u201d where it\u2019s offering homeowners fair-market value and $5,000 – $10,000 in moving costs<\/a>. Participants can give up their homes and simply leave at-risk areas. Then, the state will turn their land into green spaces, fortifying coastal resilience. <\/p>\n\n\n\n

The Role of Insurers<\/strong><\/h2>\n\n\n\n

Floods are not covered by standard homeowners\u2019 insurance. There are a few private flood insurance companies. The Florida Peninsula Insurance Co<\/a>. is an example of an insurance firm offering full policies that cover flood damage, as well as flood endorsements for policies. And Florida\u2019s TypTap<\/a> offers private flood coverage for residents of several states, including Florida, South Carolina, Maryland, New Jersey and Pennsylvania. <\/p>\n\n\n\n

The Federal Emergency Management Agency (FEMA), part of the U.S.\nDepartment of Homeland Security, is the nation\u2019s default flood insurer. It runs\nthe National Flood Insurance Program (NFIP). The National Flood Insurance\nProgram has a few issues: <\/p>\n\n\n\n