Flooding near the Peace River Campground in Arcadia, Fla., in 2022. Thomas Simonetti /The Washington Post
Hours into a marathon meeting earlier this month, and with little fanfare, the North Carolina Real Estate Commission gave its blessing to a proposal that could have profound impacts in a state where thousands of homes face threats from rising seas, unprecedented rainfall, and overflowing rivers.
Soon, anyone who sells a home in the state will be required to disclose to prospective buyers far more about a property’s flood risks – and flood history. Rather than merely noting whether a home is in a federally designated flood zone, they will have to share whether a property has flood insurance, whether any past flood-related claims have been filed, or if the owner has ever received any federal assistance in the wake of a hurricane, tidal inundation or other flood-related disaster.
With the changes, North Carolina became the fourth state this year to embrace more stringent disclosure requirements, joining South Carolina, New York, and New Jersey.
Advocates say the shifts, which for the most part, encountered little outward opposition, represent an acknowledgment that flood risks are surging throughout the country and that more transparency about those risks is a common-sense measure that could mean more homes have flood insurance and fewer buyers face catastrophic surprises.
“It’s a recognition that flooding is only going to get worse and that they need to take action now to protect home buyers and renters,” said Joel Scata, a senior attorney at the Natural Resources Defense Council, which tracks flood disclosure laws around the country. “It’s also a recognition of the importance of transparency and fairness.”
The changing disclosure policies come at a time when scientists say the nation’s coastlines will experience as much sea level rise in the coming few decades as they have over the past century. They also have documented how the warming atmosphere is creating more powerful storms and more torrential and damaging rainfalls, which already are inundating communities where aging infrastructure was built for a different era and a different climate.
The more stringent rules adopted this year also follow a path set by some of the country’s most flood-battered states.
Barbara Pearson starts the process of cleaning out her home in Pembroke, N.C., following flooding in Sept. 2018. Eamon Queeney /The Washington Post
Louisiana, facing massive land loss from rising seas and the prospect of stronger storms, has what environmental advocates and even the Federal Emergency Management Administration agree is one of the most robust sets of disclosure laws in the nation. Likewise, in the wake of cataclysmic flooding caused by Hurricane Harvey in 2017, Texas adopted new rules that have also made the state a model for flood disclosure.
But even as several additional states finalized new disclosure rules in 2023, many others still do not require sellers to divulge to buyers whether a home has previously flooded. That includes places such as Florida, which faces significant and rising risks from hurricanes, climate-fueled rain bombs, and inland flooding along rivers.
According to NRDC, more than one-third of states have no statutory or regulatory requirement that a seller must disclose a property’s flood risks or past flood damage to potential buyers. Others have varying degrees of requirements – a patchwork that means where people live can greatly influence how much they actually know about the flood risks of a home they buy or rent.
“There are still too many states who keep home buyers in the dark,” Scata said. “That needs to change. Flooding is only going to become more severe due to climate change. And people have a right to know whether their dream home could become a nightmare due to flooding.”
Earlier this year, FEMA proposed federal legislation that would require states to mandate certain minimum flood risk reporting requirements as a condition for ongoing participation in the National Flood Insurance Program. The agency said having a nationwide requirement would “increase clarity and provide uniformity” in many real estate transactions, but it has not yet become a reality.
That lack of action on Capitol Hill has not stopped individual states from moving forward.
In June, the South Carolina Real Estate Commission added new questions to the state’s residential disclosure that go into far more detail than before, including whether a homeowner has filed public or private flood insurance claims or made flood-related repairs that weren’t submitted to an insurer.
“It’s definitely a step in the right direction,” said Nick Kremydas, chief executive of South Carolina Realtors, which publicly supported the enhanced disclosure requirements. Still, he said he hopes Congress will eventually allow buyers to access FEMA’s database of flood claims for individual properties. “That’s the best-case scenario.”
The remnants of Hurricane Florence caused local creeks and rivers to rise, resulting in flooding in Fayetteville, N.C., in 2018. Michael S. Williamson/The Washington Post
Over the summer, New Jersey’s legislature overhauled what NRDC had labeled the state’s “dismal” disclosure requirements, instead putting in place new rules that require sellers to document a wide range of flood-related information. In addition, it requires that purchasers in coastal areas be warned about the potential impacts of sea level rise.
“The idea is that the more people understand about the hazards, the more they can incorporate that into their decision-making, and the more they can have ownership of those decisions,” said Peter Kasabach, executive director of New Jersey Future, a nonprofit that advocates smarter growth and resilience policies.
In September, New York Gov. Kathy Hochul signed similar legislation, calling it a “monumental step” toward protecting residents from the increasing impacts of climate change. In addition to mandating more detailed flood information, it eliminated a previous option that allowed sellers to provide a $500 credit at closing in exchange for waiving the disclosure requirement. The legislation followed a similar measure from late 2022, requiring flood disclosures for renters.
“This is a person’s home, and they should be warned,” said New York State Assemblymember Robert Carroll, a prime sponsor of the disclosure bills. “This is really about knowledge and proper warning.”
In large swaths of the country, there is little doubt that more properties are likely to face flooding risks over time.
A report last year by the National Oceanic and Atmospheric Administration, NASA, and other federal agencies projected that U.S. coastlines will face an additional foot of rising seas by 2050. NOAA has detailed how specific places are likely to see a sharp rise in high-tide, or nuisance, flooding, and that coastal flood warnings “will become much more commonplace” in coming decades.
Likewise, scientists have documented an abnormal and dramatic surge in sea levels along the U.S. Gulf and southeastern coastlines since about 2010, and other researchers have warned that the nation’s real estate market has yet to fully account for the expanding threats posed by rising seas, stronger storms and torrential downpours.
In a study last year commissioned by NRDC, the independent actuarial consulting firm Milliman found that in New Jersey, New York, and North Carolina, 28,826 homes sold in 2021 – 6.6% of total sales – were estimated to have been previously flooded. In addition, the firm found that expected future annual losses for a home with previous flood damage are significantly higher in each state than for the average of all homes, regardless of flood damage, in that state.
Because one of the best indicators of whether a house will flood is whether it has flooded before, meaningful disclosure requirements are crucial, said Brooks Rainey Pearson, legislative counsel for the North Carolina branch of the Southern Environmental Law Center, which last year petitioned the state’s real estate commission on behalf of multiple environmental and community groups to make the disclosure changes.
“People can take steps to protect themselves when you give them the information they need,” she said. “It matters because with climate change we are seeing more frequent flooding events, including more intense storms and more flooding of houses. It’s a huge investment for a family to make to buy a house. People deserve to know whether the house they are purchasing has flooded or could flood.”
Pearson says she hopes the changes coming to North Carolina and other states will help illuminate otherwise unknown risks and ultimately help reduce the number of homeowners who are displaced and devastated financially after storms such as Hurricane Florence, which battered her state in 2018.
“What it comes down to,” she said, “is giving the buyer the information they need to make smart decisions.”
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