Hundreds Gathered for 18th Annual Regional Global Real Estate Summit in New York City
New York City remains a top market for investment for international groups.
Studies conducted in 2014 by the New York State Energy Research and Development Authority projected precipitation in the New York region to increase by 1%-8% in the 2020s, 3%-12% in the 2050s, and 4%-15% in the 2080s. New York coastlines and the lower Hudson tidal areas are predicted to rise by 3-8 inches in the 2020s, 9-21 inches in the 2050s and up 39 inches in the 2080s. All these factors point to the potential of severe flooding in our area in the future.
Over the past few years, New York State counties, including Westchester County, have experienced an increase in the frequency and intensity of rainstorms. Flooding in 2007, 2011, and 2012 wreaked havoc in the surrounding areas. In 2021, a flash flood hit New York City, causing the water to quickly rise to more than five feet and resulted in the death of 11 individuals living in basement apartments. Not only has the flooding cost lives, but the flooding has also caused untold amounts of property damage, business closures, expensive capital repairs and loss of inventory. In some situations, unscrupulous landlords have made repairs to their properties, but they have failed to identify the potential flooding hazards/risks to new tenants. Those tenants, who are unaware of the propensity of significant and life-threatening flooding, run the risk of losing everything simply because the landlord does not want to disclose the prior condition for fear of losing a potential tenant and income.
As a result, Westchester County proposed and passed legislation mandating that landlords disclose flood conditions that exist or have existed on their properties. This disclosure is designed to protect and assist tenants, who will now have a remedy at law to recover the damages they may suffer at the hands of a landlord who fails to disclose all the details of the property they are leasing. It will also provide grounds for a civil action for equitable relief and costs. This law will further serve as a safety net to protect compliant landlords from liability and damage claims where they have properly disclosed their property’s propensity for flooding and the previous water heights.
This law, known as the “Flood History Disclosure Law,” was approved by the Westchester County Board of Legislators and signed by the Westchester County Executive George Latimer on June 29, 2022. This law shall take effect on Aug. 15, 2022 and will apply only to new leases or sublets, or renewals thereof, which take place after Aug. 15, 2022.
As a result, it is important that all real estate licensees be aware of its presence and understand its requirements.
The Westchester Flood History Disclosure Law: Definitions
First, the law defines “flood” as a general or temporary condition of partial or complete inundation by water caused by:
• Overflow of inland tidal waters;
• Unusual or rapid accumulation of runoff or surface waters for any established water source;
• Ponding of water at or near the place where heavy or excessive rain fell.
It defines “flood damage” very broadly as all varieties of harm resulting from a flood including conditions that have had a detrimental effect on property and people, including a person’s health.
Last, it defines “premises” as any portion of real property contained within a structure to which a tenant has the exclusive right to use or the authority to store non-real property within. Therefore, this means that the law applies to commercial as well as residential property, and includes any structure where tenants reside or where they use the premises merely for storage.
The Westchester Flood History Disclosure Law: Conduct
Any landlord who seeks to lease or rent any commercial or residential property, either through an agent or otherwise, must, prior to entering into a written lease agreement either directly or through their agent notify the prospective tenant of:
1. Whether the property is located in a Special Flood Hazard Area (as shown on the Flood Insurance Rate Maps prepared by FEMA); and
2. The propensity for flooding of the premises, if flooding has occurred to the owner’s knowledge at least one time during the 10-year period immediately preceding the date of the lease, as well as the cause of the flood damage to any portion of the leased premises.
It should be noted that if a tenant seeks to sublet a property, this duty then falls upon the subletting tenant.
The Westchester Flood History Disclosure Law: Form
Under the new law, the landlord must provide a “Flood Disclosure Form” to the prospective tenant, which must be signed by both the landlord and the tenant, which sets forth notification of the premises’ propensity for flooding. Additionally, the landlord must also provide notification of where the water line was estimated in the premises. This form will be created by the Westchester County Planning Department and it will be available on its website or by hard copy upon request. (Note: At the time of this writing, the Flood Disclosure Form has yet to be made available).
The Westchester Flood History Disclosure Law: Civil Cause of Action
Any tenant who sustains flood damage during the course of his/her/their lease as a result of a landlord’s (or subletting tenant’s) failure to comply with this law may commence an action in court to recover such damages. In such an action, if the landlord is found to have been working in concert with another party as part of a common plan or design to violate the law, those defendants shall both be held jointly and severally liable for the damages, as well as any costs and fees awarded. Arguably, if a real estate agent is knowingly involved in such a scheme, they might be held liable.
Conclusion
It is important to understand that the law and its duties apply to landlords, not real estate agents. While the law imposes no duty upon a real estate licensee to disclose such conditions, as a real estate licensee you should advise your client of the law and its requirements of providing an accurate and complete disclosure form. Further, as a Realtor pursuant to the Code of Ethics, you have an elevated duty to disclose any known condition that you are aware of relating to the property or the transaction and you should not exaggerate, misrepresent or conceal such facts, regardless of whether the landlord discloses it or not. If you exaggerate, misrepresent or conceal such facts, you may be subject to an Article 2 violation and expose yourself to potential disciplinary action, not to mention a potential investigation by the Department of State Licensing division.
Reminder and Update!
Under the newly enacted law, individuals taking the real estate salesperson qualifying course are required to take two additional hours of pre-licensing education in fair housing. Further, individuals taking the real estate brokers qualifying course are required to take an additional 32 hours of pre-licensing education of which 10 hours are devoted to fair housing. Lastly, Instructors are now required to electronically submit an affirmation to the DOS of compliance pertaining to the instruction of the established curriculum.
The anticipated effective date of these new regulations is December 21, 2022.
DOS will be holding one public hearing for comment on these regulations on September 21, 11:00 a.m. at 123 William Street, 2nd Floor, New York. Learn more.
Additionally, licensees are required to take 2 hours of implicit bias and 2 hours of cultural competency education within the existing 22.5 hours of required continued education, which will go into effect September 21, 2022.
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