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In the aftermath of Vermont’s catastrophic flooding last summer, legislators have been volleying ideas to better protect homeowners and ask for more transparency in the flood history of properties on the market. A House bill seeks to do so by requiring sellers to disclose the flood history and risks of their properties to potential buyers.
Lead sponsor Rep. Thomas Stevens, D-Waterbury, introduced bill H.639 to the House Committee on General and Housing on Jan. 12 after constituents told him they did not know their homes had already been impacted by flooding during and after 2011’s Tropical Storm Irene.
“I live on a street that was not affected by the flood,” Stevens said in an interview. “But of course, over on Randall Street and Union Street, and then our Route 2 in particular, many of our neighbors (were). But there were also other homes that actually were not near the river that got affected by the flooding or by excess water in Waterbury Center. So there was this question about, ‘Why did I not know that my house was involved in a flood as recently as 12 years ago?’”
There is no Vermont law that requires sellers to disclose the flood risk or flood history of a property to a potential buyer, nor any protections for buyers who find out about a property’s history too late to back out of a contract. That makes Vermont an outlier: 35 other states have those kinds of protections on the books, according to Forbes.
Prior to or as part of a contract, a seller would have to disclose whether the property is in a Federal Emergency Management Agency flood zone or a municipally mapped river erosion hazard zone, whether it was ever subject to flooding and the flood insurance rates if applicable.
If the seller fails to provide this information, under the bill the buyer would be able to terminate the contract and take them to court. However, if the seller received and relayed bad information from a public body or a report by a licensed professional, they would not be legally responsible.
The bill is mostly geared toward properties for sale by their owners, or between 20 and 25% of all home sales in Vermont, Stevens said.
Peter Tucker, advocacy and public policy director for the Vermont Association of Realtors, said the bill would not have much bearing on properties for sale through realtors, who via its code of ethics already must disclose such information.
“If we know that an area has been flooded several times, that is something that as an agent (bound by the ethics code), or just (by) common knowledge, would require us to make sure that was disclosed,” Tucker said in an interview. “We can’t make statements for our sellers — the seller has to disclose that information. And if the seller’s not willing to disclose something that we know could be a material fact, we can’t take the listing and we can’t work for that seller.”
Tucker stressed that while ethical codes don’t have the power of law, the majority of realtors in Vermont pay attention to the flood history and risk of properties because those facts can impact the decisions of a buyer.
“‘What is something that would cause a buyer to change either their decision to purchase or change the value that they perceive?’ That’s kind of how we look at (it),” said Tucker.
Other bills with similar goals to H.639 are on the docket this session. H.723, an act which tackles flood recovery, was referred to the House Committee on Environment and Energy on Jan 10 but has not yet been discussed. The bill includes a section almost identical to H.639 on flood history and risk disclosure.
Stevens said the legislation is important for residents in areas likely to suffer flooding in the future and that it would take pressure off buyers to investigate property histories themselves.
“It’s just about acknowledging that we live in a world now where there are going to be some homes that are going to sell on Randall Street, on Route 2 or on Union Street,” he said. “And yes, the banks will make a determination of what their risk is, and that risk might be mitigated by insurance. But the idea behind the bill is to simply say that wouldn’t it be better, wouldn’t it be nice if the potential buyers knew in advance?”