What You Need to Know About Flood Disclosure

Chances are you or someone you know has experienced flooding at some point.

Following the massive storms in the Chicago-area, many home buyers and sellers have found themselves unsure of what to do in this scenario.

Here are some things to keep in mind if you are in the process of buying or selling a home.

For sellers:

If there was flooding in your home, it is required that you disclose it on the Illinois Property Disclosure Form.

In particular, you should detail specifically what remedies and repairs were completed. Be sure to produce receipts for these repairs to any buyers.

Also, know that if you make an insurance claim on any damages, that claim will be noted in a national database of property insurance claims. This is known as the C.L.U.E. Report, and any claims within the past five years will be visible to any potential buyers. The report is designed for current and future homeowners to see all of the home’s past insurance claims.

For information about the C.L.U.E. Report, visit http://m.risk.lexisnexis.com/solutions/clue-home-seller.aspx

For buyers:

If the property you are buying received any water damage, you should not automatically back out of a contract.

Depending on the housing stock in the area and the amount of rain, it’s possible that many other homes experienced flooding of some kind. And if the seller is proactive in letting you know of any issues and subsequent remedies, that should be considered a good indication of their willingness to disclose.

Problems arise for buyers and sellers when there is poor communication, lack of transparency and the assumption of conflict. It’s always important to be proactive in disclosure.