New legislation requires flood risk disclosures in home buying

BURLINGTON, Vt. (WCAX) – With many Vermonters still picking up the pieces after last year’s flooding, new measures aim to ensure new buyers know what they’re signing up for.

There are lots of features homebuyers seek in a property. One thing no one’s in the market for is flood risk.

Anticipating that damage with thousands of dollars a year in flood insurance can be the nail in the coffin for a property sale according to realtor Lisa Meyer of Berkshire Hathaway.

“It affects people’s emotional worry. The anticipation of a potential problem, I think really does affect people,” said Meyer.

The reality of owning and selling a flood-prone property is one more Vermonters are contending with.

“It’s all about the numbers and it affects the bottom line of the income. So it will reduce the value of your property,” said Meyer.

Legislation passed this spring requires sellers and landlords to disclose if their property has been through a flood, sits in a flood hazard area, and whether they maintain flood insurance.

It gives buyers recourse to terminate a contract and recover payment if flood-related details are not disclosed. Peter Tucker with the Vermont Association of Realtors testified in favor of the new rules.

“We want to make sure that the buyers understand what they’re getting into,” said Peter Tucker of the Vermont Association of Realtors.

He says his staff already shares flood info with buyers but it’s critical to bring all sellers up to speed.

“Real estate agents and licensees that are not members of the realtor organization, and also for sale by owners to make sure that they’re at the same level,” said Tucker.

Whether buyers will bite on a flood-prone property depends largely on the state of the market.

The Vt. Association of Realtors says more properties have become available in the last year.

That means buyers have more room to shop around and can avoid at-risk properties.

“I have a three-unit building that we’re having trouble selling because of the insurance. The flood insurance call came in between $7,000 and $10,000 a year,” said Meyer.

That could leave Vermonters on flood-prone properties a little longer, at least until the market heats back up and flood flashbacks start to wash away.

“I think people are nervous about trying to market themselves. So perhaps they’re waiting a little bit longer to get let the memory of this fade a little bit more,” said Meyer.

The Vt. Association of Realtors says they’re drafting the form sellers will need to fill out to disclose flood risk to potential buyers.