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Homeowners will soon be required to report past FEMA claims to buyers

Friday, January 03, 2020

HORRY COUNTY, S.C. (WPDE) — Starting in January of 2020, homeowners will soon be required to let potential buyers know of any past FEMA claims they've made on their property.

Right now, homeowners are not required to disclose that information on the property disclosure form, which they are required by state law to complete before selling their home.

The new question on the form, question 25, asks the seller if they have made any past claims on the property. If they check 'yes,' the seller is then asked to provide more information on the claims, like when they were filed.

Broker-in-Charge for 843 Realtor, John Winzenried, said this is a big first step in making the home-buying process more transparent, especially in flood-prone coastal areas.

"Obviously for everybody to be transparent and to understand the condition of the home, and that's what a seller's disclosure is all about, for the homeowner to disclose certain conditions about the house," he said.

While Winzenried said this new question is an effort to improve transparency, he said he's still got some concerns.

He said sometimes, homeowners may not be aware of past FEMA claims on their home from before they purchased it.

"If I've been in my home for 20 years, I have a better understanding. If I've been in my home for a year and try to sell it, I have a different understanding," he said.

He said a person who has owned a home for a year may not have experienced any flooding issues or made any FEMA claims, and would check 'no' on the disclosure form. However, that doesn't mean the home doesn't have any FEMA claims from before, and he said that's still important information a potential buyer needs to know.

He said that's why realtors need access to a home's full FEMA claim history, so they can get the whole picture.

"If there was a claim filed and you want to know more about it, was it a 500 dollar claim, was it a 500 thousand dollar claim - where can they get this information?" he asked.

However, local flood victim Terri Straka said that's private information that she wouldn't want to disclose.

Straka lives in Rosewood Estates, a Socastee neighborhood that has been devastated by repeated flooding over the past few years.

She said she understands the need for transparency, but said this new requirement is a violation of privacy.

"I understand the need for it, for protecting future home buyers, but I am also concerned because of privacy issues, and the information that could be traded or accessed by whomever with the disclosure of it. How far is that going to go? What are they looking at?," she said.

Straka said the homes in her neighborhood are difficult enough to sell as it is, and this new rule would only add insult to injury.

"It would basically render their homes worthless," she said.

Straka said it's no secret that Rosewood Estates is flood-prone.

"If you know a property has flooded, it's flooded, and its rather obvious. So why do you need to know exactly how much money was drawn off that particular property?," she asked.

On the other hand, Winzenried said knowing the amount on a FEMA claim could be an important piece of information to potential home buyers, so they know the extent of the damage their possible future home has suffered.