For many years, New Yorkers who are selling their homes have been required to disclose property conditions including asbestos, hazardous waste, fire and smoke damage and pest infestations. Last September, after a year of unprecedented flooding in many parts of the state, flood risk was added to that list under a change to New York state law.
It’s now included on the Property Condition Disclosure Statement that home sellers are required to complete. Sellers now need to disclose not just that a property has experienced flooding that resulted in flood damage claims, but other information that can give potential buyers an indication of whether it’s likely to flood in the future.
What information must now be disclosed?
Specifically, sellers are required to disclose the following:
- If a property is located in a FEMA-designated floodplain or flood hazard area
- If a property has experienced “flooding, drainage, or grading problems that have resulted in standing water….”
- If the owner of the property must have flood insurance
Previously, home sellers could avoid disclosing a previous flood if they paid a $500 penalty in the form of a credit to the buyer on the price (although that should have been considered a big red flag for any potential buyer if they were aware of it). The choice to opt out of disclosing that particular information is longer allowed under the law.
There’s no question that home buyers in the past could potentially unknowingly buy a property with the potential for flooding. The Natural Resources Defense Council (NRDC) had criticized the state’s lack of adequate flood disclosure requirements and the option for people to buy their way out of full disclosure for $500. An NRDC official praised the new law for helping buyers “make informed decisions about one of the biggest financial investments of their lives — their home.”
Whichever side of a real estate transaction you’re on, it’s important to be aware of this new law and other changes to laws and regulations around real estate as they occur. This is just one benefit of having experienced legal guidance as you buy or sell property.
