Natalie Hollander – Florida’s real estate market is one of the most dynamic in the country, but it faces significant challenges due to increasing flood risks. As climate change intensifies, rising sea levels and extreme weather events threaten the value and stability of homes throughout the state. Despite these dangers, Florida’s legal framework for real estate disclosures has historically placed the burden on buyers to investigate flood risks.
House Bill 1049 (HB 1049), enacted in October 2024, marks a step forward in requiring limited flood-risk disclosures, but it still falls short of full transparency. HB 1049, codified as Chapter No. 2024-215 in the Florida Statutes, created Section 689.302, which mandates preliminary flood disclosure requirements for sellers. Understanding the history of Florida disclosure laws, identifying gaps in Section 689.302, and predicting its impact on real estate transactions are crucial to assessing whether Florida’s homeowners and buyers are adequately informed and protected.
Historically, Florida has followed the doctrine of caveat emptor, or “buyer beware,” in real estate transactions. Sellers had minimal obligations to disclose property defects, leaving buyers to uncover potential issues themselves. However, in 1985 with the landmark case Johnson v. Davis, the Florida Supreme Court ruled that sellers must disclose all known facts “materially affecting the value of the property which are not readily observable and are not known to the buyer” in residential transactions.
However, the application of this ruling to flood-related risks has been inconsistent throughout the state. Some courts have required sellers to disclose a property’s flooding history, while others have ruled that seasonal flooding is “readily observable” and, therefore, exempt from mandatory disclosure. Moreover, Florida common law has never mandated disclosure of prior flood insurance claims or federal disaster aid received by the property.
HB 1049 aims to improve transparency by requiring sellers to provide prospective buyers with specific flood-related information before finalizing a sale. The bill was signed into law and established Section 689.302 in the Florida Statutes. Under this new law, sellers must disclose whether they have filed any flood damage claims with an insurance provider, including the National Flood Insurance Program (NFIP), and whether they have received federal assistance for flood damage, such as FEMA disaster relief funds.
While these requirements represent progress, they remain insufficient. The law does not require sellers to disclose whether a property has experienced flooding without an insurance claim being filed or whether the property is located within a FEMA-designated flood zone. Additionally, the law does not require the seller to disclose if any past water damage has resulted from a natural flood event, or whether flood insurance is mandatory and, if so, the cost of flood insurance premiums for the property. Florida’s current law effectively expects every prospective home buyer to perform extensive inspections themselves, including researching and analyzing flood maps and records to evaluate their flood risks. These unreasonable expectations place an administrative and cost burden on buyers when this information is readily available from the seller. By limiting disclosure to insurance claims and federal assistance, the law leaves significant gaps that could mislead buyers into believing a property has no history of flooding simply because no claim was filed.
This lack of comprehensive disclosure increases the risk of buyers purchasing high-risk properties without fully understanding both the safety and financial risks. The consequences that follow could lead to costly surprises down the line, such as sudden spikes in insurance premiums or expensive flood damage repairs.
Although Section 689.302 is a step in the right direction, its shortcomings prompt the need for further legislative action. To fully protect buyers and ensure a more stable real estate market, Florida should consider strengthening its flood disclosure laws by requiring sellers to disclose a property’s full flood history, regardless of whether an insurance claim was filed. Additionally, sellers should be mandated to disclose FEMA flood zone designations, information about past water damage caused by natural flooding, and the property’s flood insurance premium history and current costs. Encouraging local governments to implement additional flood disclosure regulations could also help compensate for state-level shortcomings. States with some of the strongest disclosure laws, such as those discussed above, include Texas, Oklahoma, Louisiana, Mississippi, South Carolina, North Carolina, New Jersey, and New York. Florida should follow suit to better protect buyers. Section 689.302 in the Florida Statutes represents progress in Florida’s effort to improve flood-risk transparency in real estate transactions, but it does not go far enough. The law’s narrow focus on insurance claims and federal assistance leaves buyers vulnerable to purchasing homes with undisclosed flood risks. To truly protect Florida’s real estate market and homeowners, more robust disclosure laws are needed. By expanding disclosure requirements, updating FEMA flood maps, and strengthening local and state regulations, Florida can create a more resilient and informed housing market. Buyers will be adequately informed to prevent unexpected and avoidable flood-related financial burdens. Section 689.302’s current failure to address these gaps in disclosure not only puts homeowners at risk but also threatens to erode buyer confidence, ultimately destabilizing Florida’s real estate market.
