NC Real Estate Commission to Disclose Flood History to Buyers

RALEIGH, NC — The North Carolina Real Estate Commission finalized the rule to require sellers to provide potential home buyers with information about flood history and risk before they buy a home, and it will go into effect July 1, 2024. A petition to add flood-related questions to the real estate disclosure form was filed in December 2022 by Southern Environmental Law Center on behalf of NRDC (Natural Resources Defense Council), North Carolina Justice Center, MDC Inc., North Carolina Disaster Recovery and Resiliency School, Robeson County Church and Community Center, and NC Field. Providing upfront transparency about flood risks will save homeowners money in the long-run.

“Without proper flood disclosure, a home buyer is left in the dark about the risk and potential lifetime cost associated with the home. Less than 4% of homeowners in the U.S. have any flood insurance coverage, potentially leaving unsuspecting buyers of previously flooded homes to be substantially more at risk of paying out of pocket for devastating, unexpected flood damages,” said Brooks Rainey Pearson, senior attorney, Southern Environmental Law Center. “The Real Estate Commission made the right choice since the failure to require disclosure of past flood damages is already costing North Carolinians tens of thousands of dollars as climate change increases the risk of flooding.”

The average home in North Carolina with prior flood damage has an expected average annual loss of $1,211, compared to $61 for the average home. In North Carolina, 13,237 homes were purchased in 2021 that were estimated to have been previously flooded. The expected annual flood damages for these sold homes were estimated to be over $16 million. Due to the current law’s inadequate requirements, North Carolina previously received a “D” for its flood risk disclosure transparency when compared with other state policies across the country.

“Home buyers cannot be expected to make good decisions if they are denied information. Providing potential home buyers with information about a home’s flood risk is crucial for ensuring buyers can take appropriate steps to mitigate flood damages, including purchasing flood insurance,” said Joel Scata, senior attorney, NRDC. “As sea levels rise and heavy rainstorms become more common, tens of thousands of communities can expect increasing vulnerability to flooding.”

There is a growing trend among East Coast states to provide increased transparency about a property’s flood history and flood risk to homebuyers before they buy. North Carolina, New Jersey, New York, and South Carolina have all enacted — or started the ball rolling on — disclosure reforms giving home buyers a right to know a home’s flood risk. New York and New Jersey have new laws which extend similar rights to renters.

NRDC (Natural Resources Defense Council) is an international nonprofit environmental organization with more than 3 million members and online activists. Established in 1970, NRDC uses science, policy, law, and people power to confront the climate crisis, protect public health, and safeguard nature. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, Beijing and Delhi (an office of NRDC India Pvt. Ltd). Visit us at www.nrdc.org and follow us on Twitter @NRDC.