In Colorado, floods are one of the most widespread common and natural hazards that we encounter. While some floods develop very slowly, flash floods can occur in an instant. They often accompany natural disasters such as storms, early or rapid snow melts, rising rivers, and the result of wildfires leaving the ground charred, barren and unable to absorb water.
Real estate professionals and their clients looking to purchase a home need to be aware if that home is located in a floodplain, as well as what the risk of flooding is in the area.
Questions to consider
- Is the property located in an area that has flooded in the past?
- Is a property in an area where flood insurance is required?
- Was flood insurance required in the past?
- Is the property located in an area subject to flood risk that may cause many or most owners to purchase flood insurance?
What about disclosing flood damage?
Disclosures concerning flood damage and floodplains can be found in the Colorado Division of Real Estate’s Commission approved Seller’s Property Disclosure form (Residential) which contains references to “flood” in certain sections:
- (A) Structural Conditions
- (4) Damage due to hail, wind, fire, flood or other casualty.
- (J) Flooding and Drainage
- (1) Flooding or drainage.
- (N) Environmental Conditions
- (11) Within a governmentally designated flood plain or wetland area.
The Seller’s Property Disclosure (Land) and (Commercial) contain similar provisions.
Flooding is considered a material fact to a real estate transaction, and the failure to disclose flood damage as an adverse material feature, condition, or aspect of a property of which one has actual knowledge can result in liability.
What is the flood risk in Colorado?
A recent Denver Post article stated that “FEMA currently designates 43,332 properties in Colorado at an elevated risk of flooding, meaning they need separate insurance policies to cover that risk. But a separate study from the First Street Foundation estimates given changes in the climate, Colorado should have about 131,245 properties listed at elevated flood risk and insured.”
The Colorado Water Conservation Board within the Department of Natural Resources estimates that flood-prone areas have been identified in 267 Colorado cities and towns and in all 64 counties. On their website you will find information on flood preparedness, mitigation and resiliency, flood hazard mapping, the national flood insurance program, floodplain rules, and community resources.
What about flood insurance?
The Federal Emergency Management Agency (FEMA), has a free Flood Map Service Center tool for flood hazard information produced in support of the National Flood Insurance Program. You can use this mapping tool to find your official flood map, access flood hazard products, and better understand the flood risk where you live or are planning to reside.
The Colorado Division of Insurance also has important information regarding flood insurance on their "Be Prepared" section of their Homeowners Insurance page. The Division of Insurance, however, does not regulate flood insurance. That insurance program is administered by FEMA on their FloodSmart site and is available to any property owner - homeowners, renters, condominium owners, and homeowner associations, as well as businesses and commercial properties, whether or not the property is located in a floodplain.