Selling a house in NC? Soon you’ll need to tell buyers whether it has flooded before. [The Charlotte Observer]

The N.C. Real Estate Commission voted unanimously this week to move forward with a rule that will add questions about flooding history to the standard residential disclosure form, giving buyers information they haven’t generally been able to access.

Several environmental and community groups argued that North Carolina’s existing disclosure laws did not give buyers adequate information about potential flooding, adding risk to a decision that is often one of the most important financial investments people make.

“Any transaction where only one party is privy to information denied to the other is asymmetrical and inherently unfair,” the petition to the Real Estate Commission argues.

They proposed adding questions to the standard real estate disclosure form, including whether a home has suffered flood damage, whether it has a FEMA elevation certificate, whether the owners carry flood insurance and, if so, how much they pay in annual premiums.

There also are proposed questions about disaster relief, including whether a damage claim has ever been filed through the National Flood Insurance Program and whether a home has ever received federal disaster money to help pay for flood damage.

Petitioners included MDC Inc., the Natural Resources Defense Council, N.C. Disaster Recovery and Resiliency School, N.C. Field and the Robeson County Church and Community Center. The Southern Environmental Law Center represented them.

A 2022 Federal Emergency Management Agency analysis of flood disclosure laws found that North Carolina’s rules lacked many protections found elsewhere.

The state requires home sellers to disclose 1.5 of 10 possible flooding risk factors, according to FEMA. Those include whether a home is in a flood zone and some information about whether a property is required to buy flood insurance.

But North Carolina has not traditionally required homeowners to disclose whether their property has received federal disaster aid for a flooding event. If a home does not sit in a traditional flood zone, a potential buyer wouldn’t necessarily know they must purchase flood insurance to be eligible for future disaster aid.

“It’s just a tool we have to help protect homeowners from being displaced after a flooding event. It’s important because we’re seeing increased flooding throughout the state, we’re seeing it in all regions of the state and really floodplain mapping can’t keep up with what’s happening on the ground,” Brooks Rainey Pearson, an SELC lobbyist, told The News & Observer.

Thousands of North Carolina homes have flooded in recent storms. Hurricane Matthew in 2016 damaged nearly 88,000 homes, according to a state report. And 2018’s Hurricane Florence flooded nearly 75,000 buildings across the state.

Furthermore, a recent study from UNC-Chapel Hill found that 47,414 single-family homes were built in North Carolina’s 100-year floodplain between 1996 and 2018.

A home sitting outside of a flood zone also doesn’t mean it is exempt from risk. Flood maps do not account for urban flooding events or overburdened stormwater systems, the petition says, and FEMA data indicates that more than 20% of National Flood Insurance Program claims come from properties that are outside of flood zones.

“For too long, North Carolina buyers have been kept in the dark about flood risks when choosing where their family will call home. The Real Estate Commission’s decision to grant the petition rectifies the fundamental unfairness of not requiring home buyers be told about a property’s flood history,” Joel Scata, a Natural Resources Defense Council senior attorney, said in a written statement.

The commission is planning to add the new questions to the disclosure form via a confusing process.

Rather than adding the questions and needing to undergo a rule-making process around them, the commission is planning to tweak the entire state rule around the disclosure form. That change would take the actual text of the disclosure form out of the rule, instead replacing it with a high-level summary describing what can be found on the form.

With that change, the commission could more easily add any necessary questions to the form in the future.

As soon as the rule change is effective, the commission will introduce a new disclosure form.

In addition to the flooding questions, the revamped form will ask sellers whether a home has historical status or sits in a historic district; if well water at the home has been tested and when; whether it has an elevator and whether there have been any problems with that elevator.

Commission staff said they will need to hold a public hearing on the proposed rule change. The new disclosure form could go into effect as soon as July 1.

This story was produced with financial support from 1Earth Fund, in partnership with Journalism Funding Partners, as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.

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