Floods are the most common natural disaster affecting property owners in the U.S., and the effects of climate change have made floods more severe and more frequent. Understanding flood risk, whether for an individual building or across an entire portfolio, can help guard against and mitigate costly damage.
Flood risk disclosure laws require property owners to inform potential buyers of past flooding in the property and associated costs, whether the property is located in a flood plain, and/or whether flood insurance is required. Armed with this information, purchasers are able to make an informed decision about their purchase that could save them tens of thousands down the road.
Flood risk disclosure laws vary widely by state, and in many places, property owners aren’t required to disclose this information to potential buyers. Florida, Virginia, Massachusetts and 15 other states have no laws requiring disclosure of past flooding. A 2022 study commissioned by the Natural Resources Defence Council (NRDC) found that flooding-related costs to homeowners each year could be more than 20 times higher for previously flooded properties than for those that had not.
Disclosure of past flooding is just one way to predict your property’s susceptibility to flood damage. As climate change increases the likelihood and severity of flooding, a growing number of properties are at risk of being inundated.
Here’s what you need to know about flood disclosure laws in the US. To learn more about your property’s susceptibility to flooding under different climate change scenarios, view a sample risk assessment from ClimateCheck or contact us to learn about our enterprise data solutions.
Which states don’t require disclosure of past flood damage?
Eighteen U.S. states have no flood risk disclosure laws, which can protect prospective buyers from unknowingly purchasing flood-prone properties, which are extremely likely to experience flooding in the future, according to a recent NRDC-commissioned study from actuarial consulting firm Millman. For example, the study found that the average North Carolina homeowner in a previously flooded area could incur more than $18,000 in flood-related costs over the life of a 15-year mortgage and twice as much on a 30-year mortgage.
The following states don’t require disclosure of past flood damage, according to NRDC data from August 2023. The list includes states facing substantial flood risk, like Florida and West Virginia — risk made worse by a changing climate.
- New Hampshire
- New Mexico
- West Virginia
Some coastal states are making progress in protecting property owners with new flood risk disclosure rules. New Jersey and New York recently passed state laws that require property owners to disclose flood information about their properties to prospective buyers after an offer is made. Landlords must include flood information as part of a standard lease agreement for rental properties.
In North Carolina and South Carolina, stricter rules from state real estate commissions put in place in 2023 entitle prospective homebuyers to flood risk information. Sellers are required to disclose information such as whether flooding has occurred on the property, whether the owners have flood insurance, and flood insurance premiums.
How can flooding damage property?
Even seemingly minor flooding can cause serious damage to homes, infrastructure, crops, and natural habitats. Risks of fast-moving flood water and the debris it carries include structural damage to properties, which can even be swept away in severe cases. A building’s plumbing, electrical systems, and sewer systems can also be damaged by floods. Even if structural impact is minimal, damage to building materials after water has receded can cause mold that requires costly remediation.
How can I protect property from flood damage?
The first step in protecting properties from flood damage is understanding your flood risk. ClimateCheck’s comprehensive climate risk assessments can give you a clear understanding of the current and future flood risk to individual properties or to your entire portfolio.
The next is purchasing flood insurance, which is available via private insurers or through FEMA’s National Flood Insurance Program (NFIP). Because flood insurance policies typically take 30 days to go into effect, you’ll want to act on this right away.
You can also take important mitigation steps to prepare structures to better withstand flooding. Install waterproof veneers on exterior surfaces and interior basement walls to keep minor flooding from leaking in, and consider replacing flooring materials like carpet below your property’s base flood elevation (BFE) with flood-resistant tiles.
Another lower-cost way to protect a property from flood damage is to install flood vents in enclosed areas like foundation walls, crawlspaces, and basements. These structural openings allow floodwaters to flow and recede freely rather than building up pressure on walls and windows, which can lead to significant structural damage.
Larger investments in flood mitigation include elevating structures on stilts; elevating HVAC, electrical, and other essential utilities above BFE; installing sump pumps in basements; and adding backflow pumps in sewers and storm drains.
How can I learn more about flood risk to my property or portfolio?
ClimateCheck rates flood risk alongside other climate risks like extreme heat, wildfires, storms, and drought. Our team of climate risk experts uses a rigorous methodology to analyze public, private, and institutional data, giving clients a clear picture of a property’s climate risk through 2050.
Our risk reports factor in flooding caused by storm surges, sea level rise, surface flooding, river flooding, and burst dams or levees. The datasets we use go far beyond FEMA flood maps, which studies have found to be outdated or incomplete in some regions.
Because FEMA’s flood maps only show where flooding has already occurred, not where it will occur in the future, we use government, academic, and institutional sources like the Intergovernmental Panel on Climate Change (IPCC) and the United States Geological Survey (USGS). This robust data ensures clients receive a comprehensive, actionable assessment of flood risk they can use to guide their investment decisions.
Understanding a property’s flood risk before you buy is the best way to avoid significant flood-related damage and associated costs. In states without flood risk disclosure laws, or where FEMA flood maps are outdated, getting a clear picture of risk can be challenging. Working with a leading climate risk data provider fills gaps so you can act on detailed, up-to-date information.
ClimateCheck’s comprehensive assessment of flood risk incorporates note only FEMA flood maps, but other data from other government, academic, and institutional sources like the Intergovernmental Panel on Climate Change (IPCC) and the United States Geological Survey (USGS) to create a more accurate, comprehensive assessment for real estate investors. Our risk assessments project how different climate scenarios will change flood risk over time — something current FEMA flood maps don’t do. Contact ClimateCheck to learn more about getting flood risk assessments for individual properties or entire portfolios.