In terms of agents’ duties and obligations, who is responsible for finding out if a property is in a flood plain?
Is it the listing agent’s responsibility and is it mandatory to disclose? Or is it buyer agent’s responsibility as a part of their due diligence?
Both agents are responsible. It’s a material fact which is relevant to the determination of the value of the property. The Listing agent finds out and must advise the Seller. The Buyer’s agent must find this out, and must tell the Buyer.
The mere fact that the property is in a floodplain would be insufficient in and of itself. This characteristic of the property could be a plus or it could be a minus depending upon one’s perception.
The Seller likely doesn’t have to tell. That’s caveat emptor.
If, however, there had been flooding over the past few years, then, that would change things, considerably. It might constitute a latent defect which rises to the level where disclosure is required by the Sellers themselves.
The Listing agent will have to watch what they say and do, what they publish and how they respond to inquiries. Any of these might amount to negligent misrepresentations. So, they will have to be very careful.
The Buyer should know about the flood plain because their agent is under a duty to investigate, determine and verify the material facts, and disclose those facts to them. Primary responsibility here is placed upon the Buyer’s agent.
Brian Madigan LL.B., Broker