“Sunny Day flooding,” as it is called, is now a phenomenon that is occurring throughout south Florida. Without naming names, certain areas of Miami Beach, Fort Lauderdale and Delray Beach have now developed reputations for having streets with Sunny Day flooding. Yet, the wonderful beauty of our coastline still brings buyers to the area, some of them familiar with the issue and some not. However, with what seems to be the ever-rapid advancement of climate change, the incidences of Sunny Day Flooding are becoming more common place and daily living has become affected, where cars cannot traverse flooded roads, landscaping is damaged, and the occurrence of foundation water intrusion results in costly repairs. Property values are beginning to be impacted.
If you have a house in a low-lying area, you need to start thinking about the impact of climate change on your residence and its value. The situation upon us now and waiting will only work against your ability to protect your house and your investment. The purpose of this article is to assist you in evaluating your circumstances.
1. Statute of Limitations and Laches: These matters cannot wait if you are experiencing the problem. If you bought a new home or a substantially refurbished home from a builder or contractor, certain claims are covered by state statutes with time periods as short as two years. Generally, most statutes of limitations start from the date of discovery of the defect. If you are experiencing Sunny Day Flooding, you are now on notice. If you wait until it is really bad, you may be waiting to a time when your seller or builder will be protected by the statute of limitations. Laches is a concept that penalizes those who sit on their rights. Evidence may be lost. Memories may dim. So, given these concepts, it is wise to analyze your situation as soon as Sunny Day Flooding problems begin to appear.
2. Your Seller, your Broker and other professionals involved in the house closing: The vast majority of homes in south Florida are bought and sold pursuant to a pre-printed form often referred to as the “FLA/BAR Contract.” It is meant to facilitate transactions and much like your car lease or insurance policy, it is filled with “boilerplate” that most likely will not assist you with your situation. Again, the vast majority of the contracts contain the “AS/WHERE IS” provision exonerating the seller and the brokers from making any warranty or representation that might buttress your claim. By way of example, the contract specifically says that buyers cannot rely on oral assurances from their broker. So, if your friendly broker said “you have nothing to worry about,” he/she has a defense under the contract. Nonetheless, if the parties actively worked to cover up a problem, liability may still exist. This is covered below. There is little likelihood that you have a claim against your title company, attorney representing you or even your surveyor if they did their job. It is not their responsibility to bring to your attention physical conditions that affect the value of the house. However, your survey is important since it may have disclosed your flood plain classification improperly. This is something that must be reviewed.
3. Insurance: Your typical homeowners’ insurance and flood insurance, unfortunately, cannot be depended upon to make you whole. Insurance companies and homeowners have a different definition of what a “flood” may be. There is a growing debate over whether “natural” recurring events such as Sunny Day Flooding are “floods.” Certain criteria must be met. Further, flood insurance would not cover the diminution of value of your home because your neighborhood developed the reputation of being flood prone. Most flood insurance is administered through the federal government under FEMA. The maximum flood insurance coverage amount is $250,000 for the structure of the home and $100,000 for the contents of the home. “Excess” coverage over and above the maximums are available but you must add it. Do not necessarily rely upon your insurance to cover all of your problems or all of your damages.
4. Fraudulent Nondisclosure: As explained, a homeowner could be in for a rude awakening when the homeowner discovers the legal effect of the AS IS language in the standard FLA/BAR Contract. The sale of real property does have some unique features that may blunt the effect of the AS IS/WHERE IS language. Purchasers from builder and contractors of new homes can be protected by an implied warranty of proper construction or habitability. However, this may not cover the issue of the siting of a home in an area known for Sunny Day Flooding. This may be a question of first impression for the courts. With the number of “tear downs” being rebuilt, there are possibilities for a claim as if it were a new home. Aside from these claims, a buyer can consider if the situation rises to the level or being a fraudulent misrepresentation and fraudulent nondisclosure. These types of claims cannot be easily summarized. They are fact intensive. They are different in nature, but in the buying and selling of residential homes, there is a strong line of cases discussing the seller’s duty to disclose certain hidden defects. However, considering the recent appearance of the Sunny Day Flooding issue, the case law is not settled with respect to this particular problem.
5. An Evaluation: If you find yourself in the position that this has just happened once or twice and you are not certain if you should begin considering a claim, let us suggest that you have your property evaluated. There are a number of specialists who can evaluate your property’s potential in respect of non-storm related flooding events. A good “Google” search will allow you to review a list of companies that can pinpoint the likelihood of recurrence. In fact, this kind of investigation should now become part of your due diligence on any property you buy in Florida.
This article is but a brief outline of complex issues. Decisions should not be made in reliance upon this article alone. If we can assist you in respect of these issue, feel free to reach us at our offices or send us an email at Sunnydayflooding@zonelaw.com.