HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 1049 Flood Disclosure in the Sale of Real Property
SPONSOR(S): Judiciary Committee, Regulatory Reform & Economic Development Subcommittee,
Hunschofsky and others
TIED BILLS: IDEN./SIM. BILLS: CS/SB 484
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Judiciary Committee 21 Y, 0 N, As CS Yeager Kramer
SUMMARY ANALYSIS
Under Florida law, a seller of residential real property must make certain disclosures to a buyer. Currently,
Florida courts are split as to whether a tendency to flood must be disclosed to a buyer of real property, and no
Florida statute requires a flood disclosure in a real property transaction. This may leave buyers who are not
familiar with the area at a significant disadvantage. Given its history of extreme weather, several areas of
Florida could be at risk for flooding, which is typically not covered by homeowner’s insurance or hurricane
insurance.
CS/CS/HB 1049 creates s. 689.302, F.S., to require a seller of residential real property to complete and
provide a form relating to flood disclosure to a purchaser of residential real property at or before the time the
sales contract is executed. The bill requires the flood disclosure to be made in the following form:
The title of the form must be labeled “FLOOD DISCLOSURE.”
A flood insurance disclaimer must be provided which states as follows: “Flood Insurance: Homeowners'
insurance policies do not include coverage for damage resulting from floods. Buyer is encouraged to
discuss the need to purchase separate flood insurance coverage with Buyer's insurance agent.”
The seller must state whether he or she has filed a claim with an insurance provider relating to flood
damage on the property, including, but not limited to, a claim with the National Flood Insurance
Program.
The seller must state whether he or she has received federal assistance for flood damage to the
property, including, but not limited to, assistance from the Federal Emergency Management Agency.
For the purposes of the disclosure, the bill defines flooding as a general or temporary condition of partial or
complete inundation of the property caused by any of the following:
The overflow of inland or tidal waters.
The unusual and rapid accumulation of runoff or surface waters from any established water source,
such as a river, stream, or drainage ditch.
Sustained periods of standing water resulting from rainfall.
The bill does not appear to have a fiscal impact on state and local government.
The bill provides an effective date of October 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h1049b.JDC
DATE: 2/21/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Disclosure of Property Defects
As to the sale of real property, Florida historically followed the doctrine of caveat emptor, which loosely
translates to “let the buyer beware.” Under this doctrine, a seller of real property has no duty to disclose
any defects in the property, and the buyer has the burden of making diligent inspections and inquiries
for property defects.1 Essentially, the buyer purchases real property “as-is.”
However, under Florida law, a seller of residential real property must make certain disclosures to a
buyer. In Johnson v. Davis, the Florida Supreme Court held that “where the seller of a home knows of
facts materially affecting the value of property which are not readily observable and are not known to
the buyer, the seller is under a duty to disclose them to the buyer.” 2 The Court did not provide a
definition as to what is “readily observable.”
Additionally, a seller of real property in Florida is required to make the following disclosures, where
applicable:
Associations – A seller of property in a condominium, cooperative, or homeowners’ association
must make specific disclosures of information related to the association. 3
Coastal – A sale of a property located partially or totally seaward of the coastal construction
control line requires a written disclosure statement at the time of contract.4
Code enforcement – If a code enforcement proceeding is pending at the time of sale, the seller
must disclose it to the buyer.5
Lead paint – Federal law requires all sellers or landlords of residential real property built before
1978 to disclose any known information concerning potential lead-based paint hazards and
available records.6
Property tax – The seller must disclose that a transfer of ownership may lead to an increased
property tax assessment related to the Save Our Homes Amendment. 7
Radon gas – A specific disclosure relating to the risks of radon gas must be made in writing in
connection with the sale of any building.8
Sewer lines – The seller must disclose known defects in the property’s sanitary sewer lateral
line.9
Sinkhole damage – The seller of real property upon which a sinkhole claim has been made by
the seller and paid by the insurer must disclose to the buyer of such property, before the
1 Gregory L. Pierson, Striking Down the Impervious Shields: Why Caveat Emptor Must Be Ab andoned in Commercial Real Estate
Property Sales and Leases, 47 STETSON L. REV. 112, 112 (2017).
2
Johnson v. Davis, 480 So. 2d 625, 629 (Fla. 1985).
3 S. 718.503, F.S., relating to condominiums; s. 719.503, F.S., relating to cooperatives; s. 7 20.401, F.S., relating to homeowners’
associations.
4 S. 161.57, F.S.; The seller must give a written disclosure in the following form: “The property being purchased may be subject to
coastal erosion and to federal, state, or local regulations that govern coastal property, including the delineation of the coastal
construction control line, rigid coastal protection structures, beach nourishment, and the protection of marine turtles. Addi tional
information can be obtained from the Florida Department of Environmental Protection, including whether there are significant erosion
conditions associated with the shoreline of the property being purchased.” Id.
5 S. 162.06(5), F.S.
6 24 CFR Part 35; 40 CFR Part 745; See also United States Environmental Protection Agency, Lead-Based Paint Disclosure Rule
(updated Aug. 7, 2023), https://www.epa.gov/lead/lead-based-paint-disclosure-rule-section-1018-title-x.
7 S. 689.261, F.S.; the written disclosure must state: “BUYER SHOULD NOT RELY ON THE SELLER’S CURRENT PROPERTY
TAXES AS THE AMOUNT OF PROPERTY TAXES THAT THE BUYER MAY BE OBLIGATED TO PAY IN THE YEAR SUBSEQUENT
TO PURCHASE. A CHANGE OF OWNERSHIP OR PROPERTY IMPROVEMENTS TRIGGERS REASSESSMENTS OF THE
PROPERTY THAT COULD RESULT IN HIGHER PROPERTY TAXES. IF YOU HAVE ANY QUESTIONS CONCERNING VALUATION,
CONTACT THE COUNTY PROPERTY APPRAISER’S OFFICE FOR INFORMATION.” Id.
8 S. 404.056(5), F.S.
9 S. 689.301, F.S.
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closing, that a claim has been paid and whether or not the full amount of the proceeds was used
to repair the sinkhole damage.10
Subsurface rights – The seller must provide a prospective purchaser of residential property with
a disclosure summary if the seller or an affiliated or related entity has previously severed or
retained or will sever or retain any of the subsurface rights or right of entry. 11
On the other hand, a seller of real property is not required to disclose that:
An occupant is or has been infected with HIV or AIDS. 12
The property was or may have been the site of a homicide, suicide, or other death. 13
Flood Disclosure
Currently, Florida courts are split as to whether a tendency to flood is “readily observable” and thus a
fact that must be disclosed to a buyer of real property. In Nelson v. Wiggs, the buyers of a home in the
East Everglades area of Miami-Dade County purchased the home during the dry season, and the seller
did not disclose to the buyers that the land upon which the home sat flooded annually during the rainy
season.14 In that case, the flooding was so severe that snakes and alligators gathered at the property to
escape the waters.15 The Court dismissed the case against the seller, finding that seasonal flooding of
the neighborhood was common knowledge and information that was readily available to the buyers had
they exercised diligent attention.16
By contrast, in Newbern v. Mansbach, the buyers purchased a home in Destin, Florida, and the seller
did not disclose that the property was located in the Coastal Barrier Resource Area (CBRA) and thus
ineligible for flood insurance.17 The Court determined that CBRA designations are not easily
understood by laypersons and that a prospective buyer may need assistance in interpreting the
contents of public record, and thus the sellers should have disclosed such information to the buyers. 18
States that Require Flood Disclosure
Thirty-two states require some form of flood disclosure in a real property transaction.19 However,
eighteen states, including Florida, do not require a seller to disclose such information to a prospective
buyer.20 According to the Natural Resources Defense Council (NRDC), homeowners who unknowingly
purchase a home with undisclosed flood damage are subsequently likely to be inundated with bills up to
tens of thousands of dollars to repair such damage.21 In an effort to let homeowners know which states
have flood disclosure laws, the NRDC has graded the states from A (as the best) to F (having no flood
disclosure laws):22
10 S. 627.7073(2)(c), F.S.
11 S. 689.29, F.S.
12 S. 689.25(1)(a), F.S.
13 S. 689.25(1)(b), F.S.
14
Nelson v. Wiggs, 699 So. 2d 258 (Fla. 3rd DCA 1997).
15 Id. at 259.
16 Id. at 260.
17 Newb ern v. Mansb ach, 777 So.2d 1044 (Fla. 1st DCA 2001); Pursuant to the Coastal Barrier Improvement Act of 1990, Congress
mandated the exclusion of CBRAs from the Federal Flood Insurance Program. See 16 U.S.C. ss. 3501, 3504.
18 Id.
19 Natural Resources Defense Council (NRDC), How States Stack up on Flood Disclosure, (Aug. 31, 2023),
www.nrdc.org/resources/how-states-stack-flood-disclosure (last visited Feb. 2, 2024).
20 Thomas Frank, More States Are Requiring Flood Risk Disclosures. Florida Is Conspicuously Not among Them., Scientific American,
(Oct. 5, 2023), www.scientificamerican.com/article/more-states-are-requiring-flood-risk-disclosures-florida-is-conspicuously-not-among-
them/ (last visited Feb. 2, 2024).
21 NRDC, supra note 19.
22 Id.
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Flood Insurance
Florida receives an average of 59.21 inches of rain each year, and the flat terrain makes Florida more
susceptible to flooding.23 As a result, one-third of properties in Florida are at risk of severe flooding in
the next thirty years.24 Usually, homeowner’s insurance and hurricane insurance do not cover flood-
related damage.25 Nonetheless, 36 percent of homeowners believe that homeowner’s insurance covers
flood-related damage.26
Inability of Buyers to Access Federal Data on Flood-Prone Homes
The Federal Emergency Management Agency (FEMA) responds to emergencies caused by natural
disasters, including floods. Through the Flood Insurance Reform Act of 1004, Congress directed FEMA
to develop a program to reduce future flood losses.27 As part of this program, FEMA designates
properties as a “severe repetitive loss property,” a designation that covers homes that have flooded
twice, with damage totaling the value of the property, or which have flooded four times with at least
$5,000 of damage each time. There are about 45,000 of these properties in the United States, as of the
end of 2022, with about 3,100 in Florida alone.28 Florida added about 120 of those homes from 2021 to
2022.29 FEMA’s policy is to share past flood history only with a property owner that holds an active
flood insurance policy on a property, so prospective buyers may know the details of their property’s
flood history only after they have closed the deal.30
Effect of the Bill
CS/CS/HB 1049 creates s. 689.302, F.S., to require a seller of residential real property to complete and
provide a form relating to flood disclosure to a purchaser of residential real property at or before the
23 Florida Flood Insurance, Flood History, (June 1, 2022), www.floridafloodinsurance.org/flood-history/ (last visited Feb. 3, 2024).
24 Manuel Bojorquez, More than One-Third of Florida Properties Face Looming Flood Risk, b ut Some Residents Are Unawar e, CBS
News, (June 1, 2023), www.cbsnews.com/news/florida-insurance-flooding-properties/ (last visited Feb. 3, 2024).
25
Jason Metz, Does Homeowners Insurance Cover Water Dam age from Rain or a Leak? Forbes (Oct. 27, 2023),
www.forbes.com/advisor/homeowners-insurance/water-damage/ (last visited Feb. 2, 2024).
26 Jason Metz, 72% of Homeowners Don’t Understand Essential Home Insurance Coverage, Forbes (May 26, 2023),
www.forbes.com/advisor/homeowners-insurance/survey-homeowners-insurance-
knowlege/#:~:text=36%25%20of%20homeowners%20think%20that,damage%2C%20but%20it%20does%20not (last visited Feb. 2,
2024).
27 Federal Emergency Management Agency, Guidance for Severe Repetitive Loss Properties,
https://www.fema.gov/pdf/nfip/manual201205/content/20_srl.pdf (last visited Feb. 16, 2024).
28 Alex Harris, Thousands of Florida homes flood repeatedly. You’re not allowed to know which ones., Miami Herald (Jan. 14, 2024),
https://www.wusf.org/politics-issues/2024-01-14/thousands-of-florida-homes-flood-repeatedly-youre-not-allowed-to-know-which-ones
(last visited Feb. 2, 2024).
29 Id.
30 Id.
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time the sales contract is executed. The bill requires such flood disclosure to be made in the following
form:
The title of the form must be labeled “FLOOD DISCLOSURE.”
A flood insurance disclaimer must be provided which states as follows: “Flood Insurance:
Homeowners' insurance policies do not include coverage for damage resulting from floods.
Buyer is encouraged to discuss the need to purchase separate flood insurance coverage with
Buyer's insurance agent.”
The seller must state whether he or she has filed a claim with an insurance provider relating to
flood damage on the property, including, but not limited to, a claim with the National Flood
Insurance Program.
The seller must state whether he or she has received federal assistance for flood damage to the
property, including, but not limited to, assistance from the Federal Emergency Management
Agency.
For the purposes of the disclosure, the bill defines flooding as a general or temporary condition of
partial or complete inundation of the property caused by any of the following:
The overflow of inland or tidal waters.
The unusual and rapid accumulation of runoff or surface waters from any established water
source, such as a river, stream, or drainage ditch.
Sustained periods of standing water resulting from rainfall.
The bill provides an effective date of October 1, 2024.
B. SECTION DIRECTORY:
Section 1: Creates s. 689.302, F.S., relating to disclosure of flood risks to prospective purchaser.
Section 2: Provides an effective date of October 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Property buyers may avoid flood-related costs, and property owners who are trying to sell their property
may have a decrease in the market value of their property because of the required flood disclosure.
D. FISCAL COMMENTS:
None.
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DATE: 2/21/2024
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On February 21, 2024, the Judiciary Committee adopted a proposed committee substitute (PCS) and
reported the bill favorably as a committee substitute. The PCS differed from the original bill as it:
Removed the requirements to disclose the following information in a flood disclosure
statement: