Buyer in the Know: Flood & Floodplain Disclosures Under Montana Law
No matter how creative or down-right deceptive those marketing materials might be, a history of real property flooding or a home's location within a floodplain is not a selling point for real property. Flooding history and floodplain status impacts price, insurance risk and premiums, structural stability, property use, erosion, water quality, re-sale value, and poses risks to occupants (particularly kiddos, the elderly, and those with physical limitations). The good news is that so long as you've got an informed and honest seller, or a competent real estate agent or broker, or a good floodplain administrator, the flooding history or status of your property should never be discovered by you after the fact of purchase. And yet, from the calls we routinely receive, it seems to happen all the time.
First, the standard Montana Association of Realtors form calls out floodplain issues for disclosure. If they exist or potentially exist, the information should be found there. If you are not using a MAR member or going it alone, you nonetheless remain empowered make your transaction contingent upon the disclosure and review of all property conditions, including water and flooding issues.
Second, a good home inspector will call out signs of prior water damage or attempts to conceal prior water events (for example, cut or flaking drywall, among other things), which will further inform your investigation.
Third, many Montana counties have enacted their own floodplain regulations, and employ a floodplain administrator. Critically, those regulations frequently require that the seller disclose a property's existence within a 100-year floodplain. For example, Missoula County Floodplain Regulation 3.10 provides: "All owners of property in an identified 100-year floodplain as indicated on the Official Floodplain Maps must notify potential buyers or their agents that such property is subject to the provisions of these Regulations." (emphasis added). Butte-Silver Bow County Ordinance No. 18.04.090 contains the very same language.
Note that the disclosure requirement is not tied to seller knowledge, meaning that even if the seller is unaware of his or her property's floodplain status and fails to disclose, they can still be held legally responsible. In other words, these are strict-liability provisions. Regardless, the failure to comply with a city or county ordinance constitutes negligence as a matter of law. See Herbst v. Miller, 252 Mont. 503, 507, 830 P.2d 1268, 1271 (1992) (recognizing that “it is long settled” that violation of an ordinance “constitutes negligence per se.”).
And fourth, if you're looking at property in relatively close proximity to a body of water (including "dry" gulches, tributaries or outlets) and your real estate professional doesn't suggest confirmation regarding flooding history or floodplain boundaries, then that real estate professional is not working within his or her duties to you - particularly those requiring that he or she act reasonably and in your best interests - under the Montana Real Estate Licensing Act (M.C.A. § 37-51-313, et. al.). A football-field-sized tract of dryland in August may be full of water, snails, silt, and everything else that washes down and out during heavy rain or snowmelt the following spring, often with very little warning.
And along those lines, let the professionals do this work for you. If your real estate professional tells you to "check with the planning department" or FEMA to determine floodplain status, that's just plain lazy and you should find someone else interested in doing the job. A real estate commission is not a tip for printing photos with addresses, driving you around and springing for lunch; your professional should be with you every step of the way and if neither of you understands how to get to the bottom of an issue, it falls to the agent to divine a solution. Incidentally, your agent is also duty-bound to refer to appropriate professionals whenever appropriate and the failure to do so is considered unprofessional misconduct under the Montana Board of Realty Regulations. A.R.M. § 24.210.641(5)(b).