I am selling my condo in Rhode Island and the buyers need to have flood insurance. I currently have flood insurance on my building and contents. The buyers have told me that their insurance company says I need an elevation plan before they will issue a policy. This surprises me because I did not need such a plan to purchase my flood insurance, but I've been told it's now a federal law. The survey will cost me $500.


Answer: Most lawyers will give you ½ hour of free advice. I’d check if this is truly “federal law" regarding flood insurance. I'm not aware of it. However, if this is new legislation and it's in force, you may be stuck with doing an elevation plan before you can sell. As for why you wouldn't have had to do a plan when you bought, it may be because your insurance was already in place before new legislation took effect. It’s true that insurance companies may continue to honor a policy that has already been issued, but may enforce new rules when a property changes hands.

If it is not federal law, it may be worthwhile to have the buyers do some shopping around for other insurance companies. Each insurance company will have its own unique underwriting guidelines, and some guidelines may be less stringent than others. Clearly their current insurer is not going to meet their needs if they want your home.