NAR Unveils Flood Disclosure Tracker
FEMA wants a mandatory flood disclosure form from states that plan to participate in national flood insurance, but NAR’s study shows that a disclosure isn’t needed.
WASHINGTON – The National Association of Realtors® (NAR) unveiled a state flood disclosure tracker.
The association worked with the Legal Research Center to “conduct a complete, thorough, and accurate survey of existing state disclosure requirements.”
NAR says the tracker was created to “educate the public and Congress as it considers the Federal Emergency Management Administration’s (FEMA) legislative proposals to reform the National Flood Insurance Program (NFIP), including the unnecessary and misguided disclosure form proposal.”
FEMA’s proposal would create a real estate disclosure form that includes specific flood-related questions – and it would made states require those disclosure forms if they want to participate in the National Flood Insurance Program.
If the proposal becomes a mandatory rule, all but one state would be required to make significant amendments to its laws and regulations, according to NAR. It would increase most states’ “administrative and enforcement burden for a limited benefit to homeowners, buyers or renters.”
NAR says that most states already have laws in place that require flood-risk notifications.
Based on the research done by the Legal Research Center, all fifty states and D.C. already require the disclosure of known material property conditions or facts, including prior flood damage. And that, NAR says, makes FEMA’s proposed rule redundant.
“America’s 1.5 million Realtors are in the business of streamlining processes to best serve all current and future homeowners across this country,” says Tracy Kasper, president of NAR. “The proposed legislation would add unnecessary red tape to an already complex purchasing and selling process.
“Our research has found that every single state has flood disclosure requirements, and there is no need to have federal government involvement in a practice that each state knows how to handle best. The proposed FEMA form would not be useful to buyers and duplicative for sellers, virtually having them check the same box on a different form.”
NAR engaged the Legal Research Center to identify all flood disclosure requirements not identified in FEMA’s study supporting its proposal. It says the findings showed that FEMA’s proposal would require another disclosure form – but one that does not provide useful information to buyers, duplicates form questions, is difficult for sellers to fully complete, and could create new opportunities for frivolous lawsuits and technical paperwork “I-gotchas.
“The FEMA study solely considers whether specific questions are asked on a required disclosure form and ignores existing state laws, regulations and court rulings addressing flood disclosure requirements,” says Kevin Ritchey, CEO of the Legal Research Center. “A one-size-fits-all approach of a federally-required form fails to address local needs.”
However, NAR does support the Flood History Information Act, which requires FEMA to disclose its NFIP claims and disaster aid data directly to property buyers and renters. Property buyers and renters have the right to know, and the legislation would confirm FEMA’s authority to disclose this information under the Privacy Act.
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