The Virginia House of Delegates introduced Bill HB863 on November 18, 2024, aimed at enhancing transparency regarding flood risks in residential real estate transactions. This legislation seeks to address the growing concerns surrounding flood damage, particularly in areas prone to flooding, by mandating specific disclosures from property owners to potential buyers.

Key provisions of HB863 require sellers of residential properties to disclose whether their property is located in designated flood zones, including the 100-year and 500-year flood zones, as well as any history of flood damage or claims made to insurance providers. Additionally, property owners must inform buyers if the property has been classified as a repetitive risk loss structure, defined as having received two or more claims exceeding $1,000 from the National Flood Insurance Program (NFIP) within a rolling ten-year period since 1978.

The bill also stipulates that sellers disclose any knowledge of erosion, water seepage, or pooling issues, as well as whether the property is currently insured through public or private flood insurance. If available, an elevation certificate must also be provided to the purchaser, which can help assess the property's flood risk.

Debate surrounding HB863 has highlighted concerns from both real estate professionals and environmental advocates. Supporters argue that the bill will empower buyers with crucial information, potentially reducing future flood-related losses and fostering more informed decision-making. Critics, however, express concerns about the potential impact on property values and the real estate market, fearing that increased disclosure requirements may deter buyers from purchasing properties in flood-prone areas.

The implications of HB863 extend beyond individual transactions; they reflect a broader recognition of the need for proactive measures in the face of climate change and increasing flood risks. Experts suggest that enhanced transparency could lead to a more resilient housing market, as buyers become more aware of the risks associated with flood-prone properties.

As the bill progresses through the legislative process, its potential to reshape the landscape of real estate transactions in Virginia remains a focal point of discussion. If passed, HB863 could set a precedent for similar legislation in other states, emphasizing the importance of flood risk awareness in property ownership.