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As flooding grows worse in both coastal and inland areas, NAR commissioned the Legal Research Center to compile flood-related court cases over the past two decades to help identify key patterns and takeaways for NAR members as they fulfill their fiduciary duties to clients.
This research could help inform state efforts to strengthen existing property condition disclosure requirements. In addition, NAR Legal Affairs has developed guidance with best practices for flood disclosures; watch this video to learn more.
Of over 4,500 potentially relevant reported cases from 2000-2020, 61 cases were specifically related to flooding and included the real estate licensee or brokerage. Most were brought by buyers against the sellers’ agent/brokerage and typically alleged fraud, breach of fiduciary duty, negligent and/or intentional misrepresentation or omission, as well as violations of state consumer fraud or unfair trade practices laws.
Nearly all 61 cases reached the appellate court stage. Appellate courts affirmed lower court decisions in favor of the licensee defendants in roughly half (29) of the cases but reversed/remanded in 18 others, allowing plaintiffs’ claims to continue. In 6 cases, there was a significant verdict and award against the licensee/brokerage. The study includes a brief summary for each case as well as a link to the decision where available.
While this compilation includes only a subset of the court cases since 2000, it provides a solid starting point and glimpse into the types of cases that licensees/brokerages have experienced. Possible areas for further research include federal court decisions, administrative actions and litigation that is currently in process but has not yet reached a state appeals court. NAR will pursue additional research as needed.