In Texas, Home Sellers Must Now Disclose More About The Risk Of Flooding

Oct 28, 2019
Originally published on October 29, 2019 10:39 am

When Arthur Mosely moved to East Austin in the 1980s he didn't worry about flooding. His property was not in a designated floodplain, and he thought of the creek that ran behind the house as an amenity. It guaranteed privacy and a green space full of muscadine grapes and pecan trees.

But over the years more houses went up and the creek flooded repeatedly, almost reaching his house twice. "All of this was water," he explains on a recent windy morning, gesturing to a wide swath of his backyard.

About 15 years ago the city spent millions to try to control that water. It built a flood wall behind the neighborhood and improved drainage. But as the climate has warmed, storms have been getting worse. Recently, engineers looked at the rainfall data and decided the wall isn't enough.

Now, the land is designated as a high risk floodplain.

"I've seen the water come on up to almost the border line of the top of that wall," says Mosely. "So it's kind of frightening."

Hurricane Harvey prompted action

The conflict between expanding development and growing flood risk became too big to ignore after Hurricane Harvey. That's when historic rainfall flooded thousands of homes in Houston that sat in reservoirs, floodways and other dangerous areas, a risk many homeowners weren't even aware of.

That prompted lawmakers to act this year, greatly expanding what home sellers need to disclose about flood risk. The new law took effect in September.

In another Austin neighborhood, real estate agent Amity Courtois shows off a classic 1950s bungalow and explains the expanded list of questions — eleven in all — now required in the "Seller Disclosure Notice."

They address both flood risk and flood history. For example: Have you ever experienced flooding from a reservoir? Have you ever received emergency flood assistance? Do you presently have flood insurance coverage? Are you located wholly or partly in a 500 year floodplain?

The owner of this house answered "no" to these and the other questions. If the answers had been "yes," Courtois says, the seller would have needed to provide even more information to a potential buyer, and may well have had to lower the asking price.

"It's very specific rather than just big, general questions," says Courtois. She thinks the system will keep home buyers informed while also giving sellers the "chance to explain the situation."

Environmental and public safety advocates, as well as people in the insurance industry, have advocated for this level of disclosure for years. But a surprising number of states still don't require it.

A report by the Natural Resources Defense Council found that 22 states have no mandatory flood risk disclosure and several others have inadequate rules.

"Way to go, Texas," says Rob Moore, who works on water and climate policy for the NRDC.

"We shouldn't be surprised that people make really bad decisions" about where to buy a house, he says, "because state legislatures have basically decided that people shouldn't know that information."

Moore says, ideally, people wouldn't build in high risk areas. But at least with more information home buyers might make better decisions, or at least get flood insurance if they know they may need it.

Knowing a property's history will also give people a better sense of risk because floodplain maps are often outdated and wrong.

"That's why these disclosure laws are so important," Moore says. "You have to go to the source of information which is the owner of the house."

The push for a national disclosure law

Moore's group and others have pushed Congress for a federal law similar to the one in Texas, that would require strong disclosure for states to take part in the National Flood Insurance Program. But the push for a national flood disclosure requirement has been opposed by some in real estate and development, including the National Association of Realtors.

In 2017 the U.S. House of Representatives included a disclosure provision in its vote to reauthorize the National Flood Insurance Program, but the Senate never took it up.

Still, mandating flood risk disclosure appears popular among the general public.

A recent survey from the Pew Charitable Trusts found that 74% of Americans support "a national standard requiring home buyers be made aware of repeated property flooding," and requiring those buyers to purchase flood insurance.

"It's a no brainer right?" says Laura Lightbody, Director of Pew's Flood-Prepared Communities initiative. "Once you read more about it... you say, 'Oh my gosh, how is this not something that all 50 states have and that the federal government doesn't require?"'

Sitting in his backyard, Arthur Mosely agrees more disclosure is a good thing.

"Had some of those kinds of [flood] issues been brought up or discussed I would have reconsidered," he says, "because there were some other options that I had."

He says he'll be happy to tell any buyer about the flood risk of his property, if the time ever comes to sell.

: 10/27/19

In a previous version of this story, muscadine grapes were incorrectly referred to as muscatine grapes.

Copyright 2020 KUT 90.5. To see more, visit KUT 90.5.

RACHEL MARTIN, HOST:

In many states, if you're selling your home, you don't have to disclose if the property has flooded or if it's at high risk. That's becoming a bigger problem as climate change drives heavier rains and rising seas. Texas recently expanded its flood disclosure law, and some see it as a national model. Mose Buchele of member station KUT reports.

MOSE BUCHELE, BYLINE: When Arthur Mosely moved to East Austin in the 1980s, he didn't worry about flooding. Back then, he says living here felt like living in the country. And the creek that ran behind his lot provided a green space.

ARTHUR MOSELY: When I first moved out here, the creek had many vines and trees - undeveloped.

BUCHELE: It was full of wild pecans and Muscatine grapes. That didn't last long. Over the years, more houses went up, and the creek flooded repeatedly, almost reaching his house twice.

MOSELY: All of this was just complete water.

BUCHELE: About 15 years ago, the city spent millions to try to control the water. It put in a big flood wall behind the neighborhood, improved drainage. But as the climate has warmed, storms have been getting worse. And recently, engineers looked at the rainfall data and decided the wall isn't enough. Now this land is designated a high-risk flood plain.

MOSELY: And I've seen the water come right on up to almost the borderline of the top of that wall. And so it's kind of frightening.

BUCHELE: The conflict between development and growing flood risk became too big to ignore after Hurricane Harvey. That's when thousands of homes flooded in the Houston area because they sat in reservoirs, floodways and other dangerous areas - a risk many homeowners weren't even aware of. That experience prompted lawmakers to act this year.

AMITY COURTOIS: So this is a listing that I have over in Brentwood.

BUCHELE: In another Austin neighborhood, real estate agent Amity Courtois shows me a classic 1950s bungalow and walks me through the new flood disclosure process that took effect in September.

COURTOIS: So one...

BUCHELE: She pulls out a form.

COURTOIS: These are yes-and-no questions.

BUCHELE: And there are a lot of them.

COURTOIS: Do you presently have flood insurance coverage?

BUCHELE: Have you ever received emergency federal flood assistance?

COURTOIS: Are you located wholly or partly in a 500-year flood plain?

BUCHELE: Have you ever experienced flooding from a reservoir?

COURTOIS: Or previous water penetration into a structure on the property due to a natural flood event?

BUCHELE: The owner of this house answered no to all of these questions. If the answer had been yes, Courtois says the closing price would probably be lower, and the sellers would need to provide even more information to a potential buyer.

ROB MOORE: Yeah. Way to go, Texas.

BUCHELE: This is Rob Moore. He works on water and climate policy for the National Resources Defense Council and he's one of the people who says this puts Texas at the head of the pack when it comes to making sure homebuyers know about flood risk. Moore says 22 states have no mandatory flood risk disclosure, and several others have inadequate rules.

MOORE: So we shouldn't be surprised that people make really bad decisions because state legislatures have basically decided that people shouldn't know that information.

BUCHELE: He says, ideally, people wouldn't build in high-risk areas, but at least with more information, homebuyers might make better decisions or get flood insurance if they know they may need it. Knowing a property's history will also give people a better sense of risk because flood plain maps are often outdated and wrong.

MOORE: If you're not going to be able to get accurate information about flooding from a flood map, you have to go to the source of information, which is the owner of the house.

BUCHELE: Moore's group and others have pushed Congress for a federal law, similar to the one in Texas, that would require strong disclosure for states to take part in the National Flood Insurance Program. And sitting in his backyard, Arthur Mosely agrees - more disclosure is a good thing.

MOSELY: For me, for sure because had some of those kinds of issues been brought up or discussed, I would have reconsidered very seriously before I considered moving here.

BUCHELE: And he says he'll be happy to tell any buyer about the flood risk of his property if the time ever comes to sell.

For NPR News, I'm Mose Buchele in Austin.

(SOUNDBITE OF WHALE FALL'S "THE APARTMENT") Transcript provided by NPR, Copyright NPR.