{"id":4303,"date":"2024-06-24T09:31:23","date_gmt":"2024-06-24T13:31:23","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=4303"},"modified":"2024-06-24T09:31:23","modified_gmt":"2024-06-24T13:31:23","slug":"starting-oct-1st-florida-sellers-must-disclose-past-flood-insurance-claims","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/starting-oct-1st-florida-sellers-must-disclose-past-flood-insurance-claims\/","title":{"rendered":"Starting Oct. 1st, Florida Sellers Must Disclose Past Flood Insurance Claims"},"content":{"rendered":"\n
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Home sellers in Florida: Look out for a new flood insurance disclosure rule. Effective October 1, 2024, you must tell prospective buyers if your home has ever had documented flood damage.<\/p>\n\n\n\n

Ask your Florida seller\u2019s agent about the required flood disclosure \u2014 which the buyer must receive before signing the sales contract.<\/p>\n\n\n\n

Specifically, the declaration must divulge past insurance or assistance claims on account of flooding. The flood insurance disclaimer will inform the buyer: \u201cHomeowners’ insurance policies<\/a> do not include coverage for damage resulting from floods.\u201d<\/p>\n\n\n\n

Buyers should consult their insurers about buying additional coverage for flood damage.<\/p>\n\n\n\n\n\n\n\n

Flood Disclosure Is a Big Deal for Florida\u2014And a Long Time Coming.<\/h2>\n\n\n\n
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The new law takes a step in the direction of confronting development in places vulnerable to rising sea levels and floods.<\/p>\n\n\n\n

Florida has many such parcels, especially on and around the coastline. Development continues at an alarming rate<\/a> in those areas anyway. This creates a hazardous landscape for buyers, and a treacherous burden for taxpayers.<\/p>\n\n\n\n

Florida is still one of the 18 states that doesn\u2019t require flood disclosures in home sales. As we noted just last month<\/a>:<\/p>\n\n\n\n

Storm surges can flood homes. Due diligence is critical. Florida doesn\u2019t have flood disclosure laws requiring communication to potential buyers.<\/em><\/p>\n\n\n\n

In October, that changes.<\/p>\n\n\n\n

When the Law Takes Effect, Will It Lower Florida Real Estate Prices?<\/h2>\n\n\n\n

The media coverage of this issue in itself will likely spur due diligence among out-of-staters who are thinking of moving to the Sunshine State. So, buyers could be less eager to flock to Florida\u2019s riskiest areas. Because now, it\u2019s the Florida government saying: there are climate-related risks buyers should hear about, and yes, these risks are real.<\/p>\n\n\n\n

For some buyers, insurance could get so costly that the homes start dropping in value. Notably, Florida\u2019s condo properties are already getting cheaper<\/a>. Part of this is due to modifications of the Florida Condominium Act. Those changes mean condo associations have to maintain and document adequate reserve funds for maintenance and repairs. To comply, many condo properties will be raising their monthly condo association fees. That\u2019s not exactly a draw for buyers.<\/p>\n\n\n\n

All in all, buyers looking at pros and cons of buying shoreline property might have second thoughts, and go for something that\u2019s less trouble to insure.<\/p>\n\n\n\n

So, Buyers Will Be Better Informed. And Who Is Behind This Legal Change?<\/h2>\n\n\n\n

The Florida Association of REALTORS\u00ae has supported the new law. That makes sense. Agents are professionals. A conscientious agent wants both parties in the deal to feel well educated and fairly treated. So the Florida Association of REALTORS\u00ae has praised the law for supporting a home buyer\u2019s informed decision-making process. Attorney Trey Goldman, on behalf of the agents\u2019 association, told Inside Climate News<\/em>:<\/p>\n\n\n\n

We were supporters of this bill during the legislative session and are grateful that Gov. Ron DeSantis has signed it into law.<\/em><\/p>\n\n\n\n

The agents\u2019 group also thinks the state-level change will make clashes between former owners and new owners less likely.<\/p>\n\n\n\n

You might ask: What happens when legal disputes over nondisclosure have come up?<\/p>\n\n\n\n

Case law is mixed. A Florida court could find for either the tight-lipped seller or the waterlogged buyer.<\/p>\n\n\n\n

In one case, alligators liked to use a particular home to get out of flood waters. The court sided with the tight-lipped one. After all, that area was famously flood-prone. Caveat emptor!<\/p>\n\n\n\n

But Inside Climate News <\/em>describes a different outcome in another case. Unbeknownst to its buyer, a beach home on the Florida panhandle was uninsurable due to its location on flood-prone land. The court sided with the waterlogged buyer.<\/p>\n\n\n\n

Now, state law does, too.<\/p>\n\n\n\n

The state\u2019s lawmakers are grateful. The Florida legislature unanimously voted for the new rule. Yes, every single legislator supported the bill on behalf of their constituents, regardless of party lines.<\/p>\n\n\n\n

What Does This Mean for the Florida Home Buyer Who Accepts the Risk, and Closes the Deal?<\/h2>\n\n\n\n

Some will accept the risk. Inside Climate News<\/em> quotes<\/a> Mark Friedlander, who represents the Insurance Information Institute: \u201cPeople want to live on the ocean.\u201d<\/p>\n\n\n\n

It\u2019s true, of course. Or at least it\u2019s traditionally been the case. Counties with beachfronts are home to eight in 10 Floridians. Even after hurricanes wreak havoc on the coasts, people still want to live there.<\/p>\n\n\n\n

But times are changing. The steep cost of insuring Florida\u2019s real estate<\/a> is taking its toll on owners \u2014 if they can get it at all. AAA has stopped renewing Florida policies. Farmers Insurance dropped Floridians altogether. Other companies have headed out of the state as well.<\/p>\n\n\n\n

Note: The standard home insurance policy doesn\u2019t come with flood coverage. If your home could be vulnerable to flooding, special flood coverage must be bought separately. This isn\u2019t only in Florida; it\u2019s true across the country. Know <\/strong><\/em>your home\u2019s risk of flooding<\/em><\/strong><\/a>.<\/strong><\/em><\/p>\n\n\n\n

As noted by Bankrate.com,<\/em> Florida home buyers should be advised to keep their roofs in good condition. Replace roofs before they become 15 years old, to keep them in good standing for insurance coverage under current Florida insurance laws. Further advice? Install hurricane panels to protect porches and keep the home\u2019s exterior well maintained. Be aware of the risk of wind damage from large trees and potentially loose structures. Most important of all, understand your risks and research your insurance options before<\/em> signing a purchase agreement.<\/p>\n\n\n\n

Florida Flood Disclosure Law Is In Transition. More to Come.<\/h2>\n\n\n\n

Florida law already directs sellers to tell their buyers if a waterfront property is eroding<\/a> or has been the subject of insurance claims involving sinkholes. Now, add past flooding claims to the list of mandatory disclosures.<\/p>\n\n\n\n

But that\u2019s hardly the last word on the subject. We can expect a lot more debate and eventual action to strengthen Florida\u2019s flood disclosure rules. The new law doesn\u2019t address some common scenarios, like these:<\/p>\n\n\n\n