During the recent historic flood event, thousands of homes across south Louisiana were inundated with floodwater. For most homeowners, the recovery process has just begun. Information on possible funding, temporary housing, or other assistance is available from FEMA and other organizations. But if you own a flood-impacted home, you face another significant and perhaps more long-term question: What can you do now to protect the value—including the resale value—of your home? The following are a few points to consider and suggestions.
Disclosure of Flood–Related Issues
Louisiana law requires a seller of residential property to complete and provide to the prospective purchaser a property disclosure form prescribed by the Louisiana Real Estate Commission (LREC).1 The LREC property disclosure form 2 includes the following questions, among many others, that must be answered by the seller:
- “Has any flooding, water intrusion, accumulation, or drainage problem been experienced with respect to land? If yes, indicate the nature and frequency of the defect at the end of this section.”
- “What is/are the flood zone classification(s) of the property?”
- “Has any structure on the property ever taken water by flooding (rising water or otherwise)? If yes, give the nature and frequency of the defect at the end of this section.”
- “Has there been property damage related to the land or the improvements thereon, including, but not limited to, fire, windstorm, flood, hail, lightning, or other property damage? If yes, were all related property damages, defects, and/or conditions repaired?”
- “Does the property or any of its structures contain any of the following? Check all that apply and provide the nature and frequency at the end of this section. . . . mold/mildew. . .toxic mold. . .contaminated drywall/Sheetrock.”
- “Were any additions or alterations made to the property? If yes, were the necessary permits and inspections obtained for all additions or alterations?”
So not only should the seller disclose flood-related issues to the buyer as a matter of good faith, the seller is required to do so by law.
1 (La. R.S. 9:3198.)
2 The LREC property disclosure form is available here. An amended version of the form will become effective on January 1, 2017; however, the amended form does not change the disclosures discussed in this article.
Note also that Louisiana law requires licensed home inspectors to describe in their inspection reports the presence of suspected mold growth if visual evidence of mold is discovered inside the home.3 A mold inspection is outside the scope of a standard home inspection; however, if the home inspector observes mold, he must say so in the inspection report.4
Past flood damage and current mold issues have the potential to negatively impact the value of your home. So what should you do?
Protecting the Value of Your Flood-Impacted Home
A key factor in protecting the value of your home will be how well you can demonstrate to prospective purchasers, appraisers, inspectors, lenders, insurers, and others that the flood-related damage was properly repaired or otherwise addressed. What you do now will impact the future value of your home. The following are a few suggested strategies: Continue Reading After the Flood—Strategies for Protecting the Value of Your Home
Effective August 29, homeowners impacted by the flooding in Louisiana can apply for Shelter at Home. This is a new program, announced by Gov. John Bell Edwards last week that allows flood victims to live at home while they continue to rebuild, rather than stay at a hotel, shelter or rental property.
If a damaged home can be made livable with up to $15,000 in repairs, then the state will provide a crew to do the work on the property.
The program is not intended to cover the cost of a full rebuild of a home and will only cover minor repair work such as basic electrical and plumbing inspections; carpet and insulation removal; air conditioning and hot water heater repairs; and installing temporary bathroom fixtures. The program will also pay for small kitchen appliances.
Residents eligible for the program can call 1-800-927-0216 or register online at shelterathome.la.gov.
Like you, many of our colleagues, families, and friends have been hit hard by the recent, historic flooding in Baton Rouge and surrounding parishes. Our hearts go out to all.
At such times, we can and must tap into two of our greatest strengths: our strong sense of community and our unmatched resilience. Together, we are in the initial stages of a massive recovery effort that will take time, but will yield positive results—this we believe.
As you begin to rebuild your homes, businesses, and lives, we know that you will have many questions, a number of which will involve legal concerns. For decades, Jones Walker has been at the forefront of regional and national disaster recovery efforts, helping clients prepare for, respond to, and recover from crises of all types and magnitudes. We can offer effective legal advice as you address your most immediate challenges, including issues involving FEMA programs, insurance coverage, real estate, employee relations, and more.
Please contact us with any questions or to learn more about how we can help. As we move forward in this process, we will continue to publish useful updates on our website and through client alerts and social media.
We wish you strength and peace during this difficult time.