Flood risk is a major concern for landlords, tenants, and other stakeholders in New York City real estate because the city’s geographical location makes it vulnerable to extreme weather conditions such as heavy rainfall, coastal storm surge, tidal inundation, or river overflow.
Legal Requirements For Flood Disclosure
In response to the increasing dangers associated with climate change, New York State has enacted laws that require landlords and sellers of residential real estate to provide certain information to potential tenants or buyers, respectively, regarding a property’s flood risk.
This all comes courtesy of two recent laws — Section 231-B of New York State’s Real Property Law requires landlords to provide flood risk disclosures to tenants in residential leases, and Section 462 of New York State’s Real Property requires sellers to provide flood risk disclosures, among other types of disclosures, to purchasers in contracts of sale.
- Section 231-B: Residential Lease Flood Disclosures
Section 231-B applies to residential leases, including co-ops and rented condominium units. This law requires landlords to disclose floodplain status, flood history, and the availability of FEMA flood insurance to tenants. This law has taken effect as of June 21, 2023, and all new leases and lease renewals should contain this disclosure. - Section 462: Property Sales And Flood Insurance Disclosures
Section 462 applies to the sale of residential real estate. This law prohibits the once-customary practice in many parts of New York of sellers offering a $500 closing credit in lieu of providing a property condition disclosure statement. As per the new law, sellers are required to provide the statement which includes information on floodplains, insurance coverage, and the property’s flood history. This law takes effect on March 20, 2024.
Impact On Properties
Flood disclosures provide vital information needed to create effective emergency response plans and obtain appropriate insurance coverage.
New York City had a storm surge in 2012 with Hurricane Sandy and, most recently, significant flooding on Sept. 24, 2023, with one of the highest rainfalls in one day. It is clear that flooding issues for New York real estate will not cease to be an issue. In this regard, owners and tenants should not only be mindful of the law but also the impact on the property.
The foregoing is not intended to be comprehensive nor constitute legal advice. If you would like to discuss your specific circumstances or would like more information, feel free to contact us at (212) 625-8505.