Residential Lease Backs Now Require a Landlord Floodplain Addendum

Regarding TREC’s August 8, 2022 Meeting

Texas requires state agencies, such as TREC, to review their rules every four years. During the most recent review in the 87th Texas Legislative Session, a bill passed requiring a landlord to disclose the following:

  • If a dwelling is located in a 100-year floodplain
  • If a dwelling flooded within the last 5 years

Landlords should make these disclosures in the TREC Landlord’s Floodplain Notice (a new form) or the TXR Addendum Regarding Rental Flood Disclosure (an addendum to the pre-existing form). Both of these forms are now available through Sellers Shield.

Learn more about who the forms impact and when to use them below.

Who The Floodplain Addendum Affects

The new form and addendum directly affect clients participating in leaseback scenarios in which the buyer becomes the landlord to the seller/tenant.

Though it may seem unnecessary to make this disclosure to the seller/tenant (who has owned and lived in the property already), the rule’s intent is to protect tenants against a surprise flood. On the Landlord’s Floodplain and Flood Notice form, it states “Most tenant insurance policies do not cover damages or loss incurred in a flood. You should seek insurance coverage that would cover losses caused by a flood.” After the devastating hurricanes in Houston and South Texas over the last 4 years, the Committee saw the need for an update that offers protection to tenants if a flood does occur.

Landlord floodplain addendum Texas house flooding

Properties NOT in a 100-year Floodplain

Even if the property has never flooded, landlords must still make the disclosure on the TREC Landlord’s Floodplain Notice or the TXR Addendum Regarding Rental Flood Disclosure. The landlord can simply disclose that they are unaware of any flooding and unaware that the dwelling has flooded within the last 5 years. 

If the property was previously in a floodplain but was raised in elevation to be above it, the landlord does not have to disclose that the property is in a floodplain.

When The Floodplain Addendum is Active

This bill is effective as of August 30, 2022. Landlords are required to provide the completed addendum to the tenant on or before the lease is signed.

Agents representing a buyer or seller who will participate in a lease back should guide their client to these new and amended forms. Agents are able to use a different form to make this disclosure, but it must meet all statutory requirements. Additionally, as with all disclosures, agents should be careful not to fill it out for their client, as this increases agent liability in the event of a home sale lawsuit. 

How to Access The Updated Forms

To send the TREC Landlord’s Floodplain Notice and the TXR Addendum Regarding Rental Flood Disclosure through Sellers Shield, follow these simple steps:

  1. Email protect@sellersshield.com and specify if your seller needs to complete the TREC or the TXR addendum
  2. Your seller will receive an email with a link to the form
  3. Upon completion, you will be emailed a signed PDF version of the form
  4. Your seller can download the signed PDF version of the form

 

Ask Us For Help

If you have questions about how to navigate the TREC Landlord’s Floodplain Notice and the TXR Addendum Regarding Rental Flood Disclosure, reach out to us at 844-747-4435 or customersuccess@sellersshield.com.

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