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What Do State Laws Say About Sinkholes?

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By Deanne Katz, Esq. on March 04, 2013 1:30 PM

Certain areas of the country are prone to sinkholes, and disclosure laws aim to make people aware of that risk.

A sinkhole is a naturally occurring hole that forms when flowing water underground has dissolved rock below the surface. That leads to an underground void that eventually is unable to hold up the surface layer.

Thousands of sinkholes form every year, but some are more deadly than others, like the one that unexpectedly formed beneath a man's home in Florida.

What do state laws say about sinkholes?

Sinkhole Disclosure Laws

Some states, like Florida, require sellers and landlords to disclose the potential for sinkholes in an area. Failure to do so could void the sale or lease.

If you're working with a real estate or property management company, hopefully their standard paperwork includes the disclosures you need. If you're doing it yourself, a lawyer can help you draft something that's legally binding.

Even if your state doesn't have a specific disclosure law related to sinkholes, you may still face disclosure obligations. Generally speaking, property owners are required to disclose "material facts" about a property to potential buyers, while landlords are responsible for disclosing hazards on the property to tenants.

Under those provisions, you could still be in legal trouble for failing to disclose. That is, if you knew about the sinkhole to begin with.

Problems With Insurance

Sinkholes can also affect insurance policies. In Florida, for example, insurance companies don't have to insure homes that have a sinkhole "in the area." That can mean on the property, or even half a mile away. They can choose whether or not to provide coverage.

If the company will still insure you, the rates will probably be significantly higher.

When evaluating insurance, the company may run a sinkhole test while determining the policy amount. Property owners are generally entitled to a copy of that report.

Tips for Buying or Renting in a Sinkhole-Prone Area

Sinkholes can happen anywhere underground water flows through porous rock. But when it comes to big and dangerous sinkholes, it's often possible to see them coming.

Geological testing can search for the potential of future sinkholes and predict how dangerous they could be. It's possible to hire a company that can do that testing for you.

But in many cases, you can spot potential signs of danger with your own eyes. Slumping trees or fence posts; small ponds in areas where water hasn't collected before; the wilting of small, circular areas of plants; and structural cracks in walls are all signs of an impending sinkhole.

If you see those signs in a larger area, be especially careful and consider bringing in an expert to test the area. Ignoring it could be deadly.

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