Sink or Disclose: New Flood Insurance Disclosure Requirement Puts Real Estate Buyers on Higher Ground

By: Colten Thomas, Esq.

Florida’s newly effective House Bill 1049 (“HB 1049”) ushers in an additional requirement for sellers of residential real estate: to disclose potential flood risks. Beginning on October 1, 2024, sellers must complete a “Flood Disclosure” form before executing a sales contract, marking a shift toward greater transparency in property transactions.

HB 1049: Mandating Transparency

It is no secret that Florida has a history of extreme weather and flooding. Nevertheless, sellers were not required to disclose the flood tendencies and risks associated with their homes (at least, prior to Tuesday). Enter HB 1049, which bridges this gap by requiring explicit flood disclosures in real property sales.

HB 1049 created Section 689.302, Florida Statutes, which requires residential property sellers to provide a Flood Disclosure form before the contract is signed. Conveniently, the text of the required disclosure is included in the statute—and must inform buyers of the following:

• Flood insurance disclaimer. The form clarifies that homeowners’ insurance does not cover flood-related damage and encourages buyers to secure separate flood insurance.
• Flood claims and assistance. Sellers must disclose whether they have filed claims or received federal assistance for flood damage, including from FEMA or the National Flood Insurance Program (NFIP).

For the purposes of the disclosure, the bill defines “flooding” as the general or temporary overflow of inland or tidal waters, surface water accumulation, or sustained standing water from rain.

Why This Matters

HB 1049 resolves a longstanding issue for Florida courts, which were split on whether flood risks were “readily observable” and thus required disclosure. The bill ensures that buyers are informed, which should reduce their likelihood of facing unexpected flood damage. This added transparency also levels the playing field for out-of-state buyers unfamiliar with Florida’s flood history.

What Should Sellers Do Now?

Homeowners and residential sellers alike should be proactive in preparing for future property sales by gathering all pertinent flood history documentation. If you have filed a flood-related claim or received federal assistance, ensure you have accurate records! Real estate professionals should also update their practices and educate clients on this new requirement to avoid liability.

Likewise, buyers should be diligent in reviewing the flood disclosures and consulting with insurance professionals about their flood coverage options.

Summary

HB 1049 signals a change in the tides for the Florida real estate market, offering buyers a clearer view of potential flood risks and fostering much-needed transparency in residential property sales.