New rules will require flood history disclosure in real estate

CARTERET COUNTY - Homebuyers will soon have a clearer understanding of flood risks and history when purchasing a property, thanks to new rules adopted by the N.C. Real Estate Commission (NCREC).

The change came after a petition was filed in December by several groups, including the Natural Resources Defense Council (NRDC) and the North Carolina Justice Center, citing inadequate disclosure requirements in previous rulings.

While sellers already had to say if a property is in a flood hazard zone and required insurance, the amendments will require disclosure of additional flood-related details.

Sellers will now have to share whether a property has flooded in the past, the number of times it has flooded, the amount of any flood damage insurance claim filed and whether the property has flood insurance.

The disclosure statement must also indicate if there is a FEMA elevation certificate for the property and if the property has received federal disaster flood assistance.

With flooding being one of the most common natural hazards in the state, Carteret County Association of Realtors President Gigi Robles believes the new requirements will provide an important piece of information for future home buyers.

"While realtors are able to research flood maps and provide flood zone status information for their clients, it is nearly impossible to know the flood history on every property without the current homeowner providing this information," Robles said. "Adding flood disclosure information to our current residential property disclosure form is another step in providing transparency to potential home buyers. It is important for all potential home buyers to have as much information possible on what could be the largest investment they will make in their lifetime."

North Carolina experienced two massive flooding events that caused significant damage in the past seven years, including Hurricane Matthew in 2016 and Hurricane Florence in 2018.

The effects of these storms, as well as those that came in decades before, are still having an impact on real estate in the area.

"It is generally thought since we are by the coast that our area has the most risk or potential for flooding," Robles said. "That’s not necessarily the case. As we learned from past storms like Fran, Floyd, Matthew and Florence, many areas west of Carteret County that were not historically considered to be in flood zones were severely impacted by flooding."

According to a 2022 study by the NRDC, more than 290,000 single-family homes in the state have had flood damage, with over 13,000 sold last year alone.

The study also revealed many flood zone maps are decades out of date and not all flooding events have been recorded, resulting in inadequate disclosure of flood risks and damage.

The N.C. Emergency Management Association, a state-wide organization for professional emergency managers, also said North Carolina had 11,984 residential repetitive loss properties documented in 2022 with a net increase of 3,344 repetitive loss properties since 2017.

The NCREC will hold a public hearing April 20 on the new rule change.

Without major objection, the new disclosure guidelines could go into effect as soon as July 1.