Tag Archive for: disclosure

Texas Now Has Flood Disclosure For Renters

Several years ago, a new Texas law mandated flood disclosure for home buyers. Effective January 1, 2022, we now have a similar law for renters. The last legislature added a new section to the Texas Property Code: § 92.0135. But read the fine print. The law has some huge “qualifiers.”

Jennifer Parks Rental townhome
Many of the Marina Drive Townhomes destroyed by Harvey were rented out. Even though the ground level flooded frequently, landlords in such situations would not have been required to disclose past flooding...until this year.

Floodplain Disclosure Requirement

The new law requires landlords to provide tenants with special notice if their structure is located in the 100-year floodplain designated by FEMA. The notice must also inform tenants that:

  • “Even if the dwelling is not in a 100-year floodplain, the dwelling may still be susceptible to flooding.”
  • “Most tenant insurance policies do not cover damages or loss incurred in a flood.”
  • “You should seek insurance coverage that would cover losses caused by a flood.”

Exception for Elevated Structures

However, the landlord is not required to tell tenants that the property is in the floodplain if the building has been elevated above it. Hmmmm. What about that vehicle in the parking lot?

Flood Disclosure Required…But Only If in Past 5 Years

Regardless of the floodplain status, if a building has flooded in the last five years, the landlord must disclose that to a prospective tenant. This five-year limitation, is one of the biggest flaws in the law, in my opinion. The landlord would currently not have to disclose flooding in the 1994, Allison, Ike, the May 25-27 floods in 2015, or the Tax Day and Memorial Day Floods in 2016. And come September, the landlord would not have to disclose flooding during Hurricane Harvey either.

A lady in the apartment complex pictured above flooded eight times in five years!

Written Communication, Separate From Lease Required

However, if the landlord must provide notice, he/she must do it in separate written communication at/or before the signing of the lease.

“Substantial Loss” May Trigger Termination of Lease

If the landlord fails to provide the required notice AND if the tenant suffers a “substantial loss,” the tenant may terminate the lease within 30 days after flood damage occurred. The law defines substantial as 50% or more of the value of repairs to or replacement of the renter’s personal property – on the day the damage occurred.

Lease Termination Only Allowed For 30 Days

Another “but”: termination of the lease becomes effective when the tenant moves out, not at the time of damage.

Within another 30 days after the termination of the lease, the landlord must refund “all rent or other amounts paid in advance under the lease for any period after the effective date of the termination of the lease.”

Flooding No Excuse for Unpaid Rent

The new law does not affect “a tenant’s liability for delinquent, unpaid rent or other sums owed to the landlord before the date the lease was terminated.” So, in other words, if it takes you a full month to move your flood damaged possessions out after the flood, you would owe the landlord for that month.

I am not a lawyer and do not provide legal advice, but that’s how I read the law. Regardless of whether you are a landlord or a tenant, you should read it yourself and discuss it with your lawyer if you have questions.

Posted by Bob Rehak on 4/16/22 based on a tip from a reader

1691 Days since Hurricane Harvey

Editorial: Need More Disclosure, Education About Flood Risk

Who teaches young home buyers about flood risk? No one in my experience.

More than forty years ago, I bought a new house next to a creek in a Dallas suburb. The trees and the view attracted me. Before I put money down, I asked about flooding and was assured that the home was two feet ABOVE the hundred-year flood plain. The homebuilder even showed me a survey and a drainage study, and pointed to the engineers’ stamps. I pulled out my checkbook and made the most tragic, costly decision of my young life.

Within a year, other developers just upstream from me built the Collin Creek Mall and Plano became the fastest growing city in America. With each passing month, rains made the creek swell higher. Then one day after a modest rain, I saw a pickup truck floating down the creek and the water creeped into my house.

Alarmed, I called the City Engineer. He convened a task force that included Garland, Richardson and Plano City Engineers. They asked the Army Corps of Engineers to re-survey the creek. The Corps found that…

…instead of being two feet above the 100-year floodplain, we were now 10 feet below it.

Had I known such dramatic change could happen so quickly, I never would have bought the home. I decided to sell, disclosed the flood risk, and lost a pile of money.

Costly Lessons Learned

That experience taught me several lessons.

  • Flood forecasting is a very inexact science. Changing conditions – such as upstream development, climate and political priorities – make it so. They are beyond the ability of engineers to predict.
  • Developers use the surveys and analyses that engineers produce to obtain building permits.
  • Their documents do not reflect the potential for future change.
  • Homebuilders, nevertheless, use the engineering documents to reassure future buyers that they are safe.

All along the way, people throughout the value chain make expensive binary decisions based on documents that don’t reflect future flood-risk. Permit or don’t? Invest or don’t? Build or don’t? Lend or don’t?

Flood Risk is Non-Binary, Flood Education Non-Existent

Professionals understand the flood risks involved. Members of the public rarely do. And that’s a powerful argument for flood-risk education and fuller disclosure.

But buy a house with a view of a river! You’ve achieved the American Dream, paid a premium, and the only information people volunteer along the way is a reminder to buy flood insurance.

It’s as if the chance of flooding equals the chance of getting hit by lightning.

According to the CDC, the odds of being struck by lightning in a given year are only around 1 in 500,000.

But the odds of flooding in a “500-year rain” are 1 in 500a thousand times greater. But most home buyers don’t worry about that. So builders keep building in flood plains. And buyers keep buying.

Everyone along the way – land owners, developers, public officials, engineers, and home builders – is financially incentivized to “make the sale.” Growth is good – especially to the people who enable it.

Example: Need for Flood-Risk Education

Below is a photo that shows part of a new development in Porter between Sorters-McClellan Road and the San Jacinto West Fork. At the start of 2019, it was all woods and wetlands bracketed by streams and a drainage ditch. Wetlands and the proximity to floodways increase flood risk.

New woodless Northpark Woods development in the floodplain of the San Jacinto West Fork.

However, FEMA’s current flood map (see below) was developed in 2014. That was before Harvey. It shows about half of the development (outlined in red) to be in the 100- or 500-year floodplains. But those floodplains will soon expand based on data collected after Harvey. The new flood plains will likely cover most of the site. But is anyone disclosing the current or potential flood risk?

Northpark Woods highlighted in red. Floodplains delineated based on 2014 map which is now being revised and will be released soon. Cross-hatch = floodway. Aqua = 100-year floodplain. Brown = 500-year floodplain. From FEMA’s National Flood Hazard Viewer.

Selling the Dream vs. Disclosing Risk

Young, first-time home buyers will mortgage themselves to the hilt to get a nice home with a water view. But there’s less risk disclosure on this developer’s website than on the back of a candy bar.

New homes here range from $225,000 to more than $300,000 with estimated mortgages starting at about $1,000 per month. The developer claims, “Our homes are where memories are made, families are raised and stories unfold. Our mission is to create thriving, enduring neighborhoods by building new homes with lasting livability.”

The developer’s website also boasts of “close proximity to the West Fork San Jacinto River where locals enjoy swimming, fishing, boating and skiing…” And they brag about nearby championship golf courses, owner financing, online buying, and $95 down. But they never mention flood-risk or even flood insurance once the website that I could find.

A home in the 100-year floodplain has, on average a 1-in-4 chance of flooding during the life of a 30-year mortgage. And keep in mind that those floodplains are shifting targets. Even a home in the 500-year floodplain has a 6% chance of flooding in 30 years.

All up and down the West Fork, East Fork, Bens Branch, Spring Creek, Peach Creek, White Oak Creek, Luce Bayou, Tarkington Bayou, and other area watersheds, similar developments are sprouting up in risky places.

People put their life savings in these homes and there’s less disclosure than on a candy bar.

Realistically, that’s not going to change. So “Buyer Beware”! People must educate themselves about flood risk. Start by referring friends and relatives in the market for a home to these posts. They explain where to find reliable, objective information about flooding and flood risk.

Posted by Bob Rehak on 1/16/2022

1601 Days since Hurricane Harvey

The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.