Organizations in 18 states united to support a federal real estate flood disclosure requirement so consumers don’t make their largest purchase without knowing the property’s flood risk.
Most homeowners don’t know that if their home is in the 100-year floodplain, the likelihood of flooding during a 30-year mortgage is approximately one in four. That’s much higher a risk that the home has for fire, a letter to Congress from the 130 plus organizations said.
With Hurricane Sally making landfall in Alabama and Florida on Sept. 16, just a few weeks after Hurricane Laura arrived in Louisiana and Texas, plus Hurricane Isaias hitting North Carolina early in August, as reported in Wikipedia, the threat of flooding is evident.
Some states require flood disclosure information, but without a national standard the organizations told Congress in their letter that most homeowners and renters are ignorant of flooding risks. As the most common – and most costly – natural disaster in the nation, having this information could prevent thousands of flood victims from facing ruin over insufficient insurance coverage.
Federal policy requires lenders to notify borrowers of any flood insurance requirements, the letter said. What information is shared falls short of what’s needed to make a major financial commitment. The organizations told Congress in the letter that with this false sense of security and a hesitance to spend money that might not be needed, insurance coverage is insufficient and mitigation efforts are skipped that could cut the risk of flooding.
The organizations, including eight in Florida, want passage of legislation already in Congress. It would require the Federal Emergency Management Agency to create a minimum standard for flood disclosure. This would apply to any communities that participate in the National Flood Insurance Program.
Potential homeowners, renters and businesses would get the history of flooding or flooding damages known to a seller or lessor, the letter said. That would give them a better handle on the property’s relative risk so they could make the best decision on insurance and mitigation measures.
“With billions of dollars and countless lives at risk and following yet another year of record-breaking storms and floods, now is the time for Congress to act,” the organizations’ letter said.
Florida organizations that back the legislation include: 1000 Friends of Florida, Conservation Foundation of the Gulf Coast, Federal Association for Insurance Reform (FAIR), Florida Association of Counties, Florida Floodplain Managers Association, Florida Wildlife Federation and South Florida Wildlands Association.
