Buying or selling a flooded home
The floods that hit Calgary in June 2013 did a lot of damage to many homes and condos.
The flood will affect the real estate market in Calgary for some time to come. About 660 homes that were for sale were affected by the water and needed to be taken off the market. These 660 home sellers need to make a decision. Do I sell my home at a reduced price, do I renovate it first or, perhaps, do I not sell at all? So, what do you need to know when buying or selling a flooded home?
Many home sellers find themselves now in unusual legal and ethical transactions with the sales of their homes. Some affected homes were already sold and possession by the new buyers was near. The question is what do you do as a seller and what do you do as a buyer? Because every situation is different, there is no simple answer. The only answer we can give is to contact your lawyer, whether you are a buyer of an affected home or a seller of an affected home.
A big word within real estate is disclosure. As a seller you must disclose if your home has been affected by the flood. Even after the home has been fully renovated. After all, who defines ‘fully renovated’? Was the renovation done by a professional contractor? It is not up to the seller of the home to determine the quality of the renovation. It should be the buyer deciding if it is to his/her satisfaction or not.
What if it concerns a condo, where the unit itself has not been affected, but the parkade has been affected? Then, also, as a seller you must disclose this to a buyer. The water may potentially create costly, necessary repairs. The words ‘special assessment’ will come up more often in the near future.
What if the home was in a flood affected area, but the home was saved from the water? Do you still have to disclose this to potential buyers? The answer is “Yes”. In 2005 many homes got flooded; as well, many homes were saved that year. Some thought that if their home did not flood in 2005 it would never flood. However, 2013 showed that also those homes could flood.
If your home is on a flood plain, you also must disclose that to buyers. Always. Many buyers come from outside Calgary and many immigrants buy homes in Calgary. Those home buyers new to Calgary must be informed of the circumstances.
With many variables possible, the conclusion about what to do when buying or selling a flooded home is contacting your real estate lawyer. Also, if you are buying a home, make sure you get a home inspection done with thermal imaging. If you have any questions or concerns about flooding, the Province of Alberta has a map and information on flood plains. As well as the website of the City of Calgary gives lots of information about the subject.