Buying a home comes with many checklists and potential complications, and many would-be buyers run into other issues: some states have no or weak flood disclosure laws. That lack of information can end up costing homeowners tens of thousands of dollars down the line if their home floods again, and climate change is heightening the risks involved. Joel Scata, Senior Attorney at the Natural Resources Defense Council, joins Closing Bell to discuss how homeowners are financially impacted by a lack of flood information, what needs to happen to solve this issue as climate change worsens, and more.

Closing Bell

The High Cost of a Flooded Home: Study Shows Homeowners Financially Soaked by Undisclosed Flood Histories

and costs and interest rates aside, buying home presents risks and issues that would be homeowners might not be aware of and that does include flooding, especially if the property that they set their sights on has flooded previously. A new study showing that a home buyer can end up paying tens of thousands of dollars in flood damage costs thanks to a weak real estate disclosure laws. Joining me now is Joel scott, a senior attorney at the Natural Resources Defense Council, Joel thanks so much for coming on the show. So let's kick things off here with the disclosure laws. Why is it that some of them don't disclose information about previous flooding in homes? Yeah, thank you for having me on the show. So the majority of disclosure laws in the United States are inadequate when it comes to requiring a home seller to disclose to a home buyer, a property's past flood damages or greater flood risk history. And that's a real problem because as you pointed out, the report that we can mission shows that it can be financially ruinous. Um, unsuspecting home buyer who buys a previously flooded home could be paying tens of thousands of dollars over the course of their mortgage and flood damages and states have the power to change. They shouldn't be having or allowing bad disclosure laws to be on the books because it really is hurtful to homebuyers. Is there any positive momentum jewel, where we could actually see some of these gates take more action to change this, especially in the wake of more extreme weather that we keep seeing along with climate change. Absolutely. So after hurricane harvey texas, um, really improved their real estate disclosure law concerning flooding. And now it has one of the best disclosure laws in the nation in terms of what must be disclosed to a Homebuyer, including past flood damages in the amount of those damages, whether flood insurance is required on a property, how often the properties flooded in the past as well as several other factors about flooding that have to be disclosed to a home buyer and you're starting to see other states take interest as well. Um, this past fall or this past spring new york just adopted at real estate disclosure law aimed at renters, that means renters access to information that they normally wouldn't have a right to know. And you, and I think a lot of it as you point out has to due to the fact that if you look all around us, we're seeing flooding happen a lot more often due to climate change and sea level rise. Right? And it is devastating. I mean, obviously you need to fix, it takes time and money to fix from the devastation. But also I do think Joel correct me if I'm wrong, if you buy a home in one of these flood zones, that's gonna mean higher insurance costs off the bat as well. Is that the case? Yes, that that is the case. So if you own a home and 100 year floodplain and you have a mortgage on that home that's federally backed, then you are required to buy flood insurance and certain areas that have really high flood risk, you could see really high flood insurance costs. It's incredible. So what should homeowners know, how should they prepare themselves and navigate these waters literally and figuratively As we do continue to see, climate change caused more extreme weather. I'd say the first thing for homebuyers to do is to ask a lot of questions of the seller, um, ask information about whether properties previously flooded even if it's not disclosed in the real estate disclosure form. Home buyer always has a right to ask. And so home buyers should be asking questions about properties flood history. They can also look at online resources to look at the property's flood risk from going to the Federal Emergency Management Agency's website that allows you to see if your home is in a federally designated floodplain. To another website sponsored by First Street Foundation, which actually gives you a projection of what your flood risk might be over the course of a mortgage. So there are options out there, um, for homebuyers. But when it really comes down to it, it has to be information coming from the cellar because the seller is the one that will know the history of um, of their property and whether is flooded before and that really needs to be communicated to a Homebuyer. Okay, interesting. So based on what you're telling me, Joel based on what we see with increasing extreme weather as we've been discussing here. Certainly climate change. I mean, do you just recommend that every Homebuyer, anyone who has a mortgage get flood insurance to protect against the worst? I would recommend yes getting flood insurance, especially if you're in areas that could flood, even if you're outside of the mandated 100 year floodplain. It's a good idea to get flood insurance and as we've seen this past summer floods that are increasing and are occurring in areas and that um severity is that we haven't seen before. And that is, I think a good indication that the more you can protect yourself financially, the better off you will be. So I'm also reading here that fema's actually proposed that Congress step in Congress take action and amend the National Flood Insurance act to explicitly require info about past home floods. Where does that stand? And do you think it could actually happen? Yeah. So as you pointed out, fema is proposing there be a nationwide real estate disclosure requirement. If you want to have a community that participate in the national flood insurance program and it basically would require any seller of a property that has flooded before to tell a Homebuyer about that history. And I think that there is a lot of support for across the nation and from both sides of the aisle, just because the risk of flooding are so high and it can be really financially ruinous. I mean, the report released shows that can cost, you know, someone in new york upwards of $100,000 over the course of 30 years due to flood damage is, and so I think that as you start to see more floods and as you start to see the impacts of climate change, you really will see support for proposals like the one from fema move forward. All right, Joel scott, a senior attorney at the National Natural Resources Defense Council, Joel, thank you so much for coming on the show.