Do I Need to Disclose Possible Flooding if the Sellers Deny Flooding Occurred?

Question

I am the listing agent for a house. When I asked my sellers whether the house has ever flooded, they said, “No.”

However, the neighbors across the street are telling me the entire neighborhood flooded and they think the house that I am listing flooded, too.

How do I handle this situation?

Answer

As a result of the floods that occurred throughout Acadiana (and other parts of Louisiana) in August, 2016, this scenario is going to become more and more prevalent.

When an agent lists a house, the agent should not ask, “did the house flood?”

The definition of “flooding” varies from person to person. Your seller might believe a house needs to take on a foot or more of water before it is considered to have “flooded.”  While your definition of “flooding” might be:  if the house took on even an inch of water, then it is considered to have “flooded.”

Instead, you should ask your sellers, “Has your house ever taken on ANY water?” and “If so, how much and from what source?”

This suggested “phraseology” is supported by Section One, Question #5, of the Property Disclosure Document for Residential Real Estate, wherein the Louisiana Real Estate Commission phrases the question about “flooding” as follows:

“(5) Has any flooding, water intrusion, accumulation, or drainage problem been experienced with respect to the land? If yes, indicate the nature and frequency of the defect at the end of this section.”

If you’ve asked whether the house has ever taken on any water and the sellers deny that it has, but the neighbors still believe the house took on water and/or flooded, you have a slight dilemma that needs to be addressed.

It might be wise to have a sit-down conversation with the Sellers and let them know that as a result of their neighbors’ belief that the house flooded, the Sellers could be in a very bad spot in the future (i.e. in the middle of a possible lawsuit filed by the Buyers) if their house did, in fact, take on any water but the Sellers failed to disclose this fact.

If, after this conversation, the Sellers admit the house took on water, but request you keep that information confidential, you could tell your Sellers that whether an item is deemed confidential is governed by Louisiana Revised Statutes 9:3891.

According to Louisiana Revised Statutes 9:3891, paragraph six (6), if the item being requested to remain confidential might be a serious defect of the house or if the item might be considered material information about the physical condition of the property, then that item is not considered confidential information, and must be disclosed.

I think most everyone would agree that a house taking on any amount of water would be considered, at the very least, “material information about the physical condition of the property” that needs to be disclosed.