EnvironmentalIntermediateAlabama Exam

A seller of a property in a FEMA flood zone must disclose this fact to the buyer:

AOnly if the property was previously flooded

BBecause it affects the buyer's insurance costs and property useCorrect

COnly if required by the lender

DOnly if the property has flood damage visible, as a general rule

Why Because it affects the buyer's insurance costs and property use Is Correct

Answer B: Because it affects the buyer's insurance costs and property use

Flood zone designation is a material fact that affects insurance costs, financing requirements, and property use, and must be disclosed to buyers.

Exam Tip: Environmental

Environmental questions test knowledge of hazards like asbestos, lead-based paint, radon, and mold. Know the disclosure requirements and when a professional inspection is required. CERCLA liability is strict, joint, and several.

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Key Terms to Know

Private Mortgage Insurance (PMI)

Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.

Zoning

Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.

Variance

Official permission to use land in a way that does not conform to the applicable zoning ordinance, granted by a zoning board when strict enforcement would cause undue hardship.

Eminent Domain

The power of government to take private property for public use, with the requirement to pay the owner just compensation.