Issue link: http://dsnews.uberflip.com/i/1513140
December 2023 » thefivestar.com 7 December 2023 M T E C H NAR UNVEILS FLOOD DISCLOSURE TRACKER T he National Association of Realtors (NAR) unveiled a state flood disclosure tracker, having worked with the Legal Research Center to conduct a thorough survey of existing state disclosure requirements. This track- er aims to educate the public and Con- gress as it considers the Federal Emer- gency Management Administration's (FEMA) legislative proposals to reform the National Flood Insurance Program (NFIP), including the unnecessary and misguided disclosure form proposal. Under the proposed legislation, to qualify for the NFIP, states would be required to mandate a real estate-related disclosure form with specific flood-relat- ed questions. If passed, all but one state would be required to make significant amendments to its laws and regulations, significantly increasing states' admin- istrative and enforcement burden for a limited benefit to homeowners, buyers, or renters. Based on the research done by the Legal Research Center, all 50 states and D.C. already require the disclosure of known material property conditions or facts, including prior flood damage. Most states have added flood-related disclo- sure forms and requirements developed by local authorities with unique knowl- edge and expertise, benefitted from decades of court decisions and interpre- tations of common law, and have been tailored to meet state-specific flooding concerns and enforcement. "America's 1.5 million Realtors are in the business of streamlining processes to best serve all current and future home- owners across this country," said Tracy Kasper, President of NAR. "The proposed legislation would add unnecessary red tape to an already complex purchasing and selling process. Our research has found that every single state has flood disclosure requirements, and there is no need to have federal government involve- ment in a practice that each state knows how to handle best. The proposed FEMA form would not be useful to buyers and duplicative for sellers, virtually having them check the same box on a different form." NAR engaged the Legal Research Center, which has decades of legal research and real estate expertise, to identify all flood disclosure requirements not identified in FEMA's study support- ing this proposal. NAR asked the Legal Research Center to evaluate state disclo- sure laws using three guiding principles: is it useful information for homebuyers, is it reasonable for sellers to provide, and is it feasible for states to administer and enforce? The findings underscored that FEMA's proposal would require another disclosure form that does not provide useful information to buyers, duplicates form questions, will be difficult for sellers to complete fully, and could create new opportunities for frivolous lawsuits and technical paperwork. "Our research reveals that states have a long history of tailoring and enforcing their respective disclosure requirements to meet state-specific flooding concerns," said Kevin Ritchey, CEO of the Legal Re- search Center. "The FEMA study solely considers whether specific questions are asked on a required disclosure form and ignores existing state laws, regula- tions, and court rulings addressing flood disclosure requirements. A one-size-fits- all approach of a federally required form fails to address local needs." While opposing FEMA's disclosure form proposal, NAR does agree that the federal government can and should do more to help inform property buyers and renters as part of broader NFIP reform legislation. For example, NAR supports the Flood History Information Magazine INTRODUCING The Five Star Institute's premier trade publications, DS News and MReport, have joined forces to become MortgagePoint. This new publication brings you the same exclusive news, features, interviews, and commentary you've come to expect from Five Star—now taken to the next level and all in one place. MortgagePoint is your one-stop shop for coverage of the full spectrum of mort- gage, from originations to default. Scan the QR code to sign up and learn more. THE INDUSTRY'S MOST VALUED PUBLICATIONS JOINING FORCES