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REcolorado

Gov. Taskforce on Wildfires

06-24-2013

Governor's Task Force on Wildfires Hits Homeowners at Point of Sale For Properties in Wildland Urban Interface (WUI)

Last Week, the Governor's Task Force on Wildfires made final recommendations regarding properties located in the Wildland Urban Interface (WUI). If the recommendations are accepted, real estate transactions will change significantly, and the homeowner (seller) will be held liable. The Colorado Association of REALTORS® has already been in touch with local Government Affairs Directors across the state, and the general response to CAR has been to fight the proposed requirements. SSBR's GAD, Sarah Thorsteinson, has asked to be actively involved and advised of these discussions as the mountain areas are particularly vulnerable to being include in WUI areas. In addition to the proposal below, the task force is also recommending a higher property tax assessment on homes located in the WUI to help offset the cost of the wildfire damage to insurance companies. This property tax could be exempted by a property owner if a certification is obtained that says defensible space requirements have been met at said property. The recommendations also include:


* Disclosure:

* The existence of the Risk Maps through the Colorado State Forest Service provides the foundation for determining if a property is located in a designated WUI. If it is determined that this is the case, then that determination will trigger a required DISCLOSURE, similar to what a real estate agent discloses in listing a property for sale that is in a designation Flood Plain that requires flood insurance. This disclosure then puts any potential purchaser of the property on notice that the purchaser is contemplating the purchase of a property that has an added risk due to its location being in a WUI.

The disclosure not only makes sure that the purchaser is going in to the acquisition of the property knowing of the wildfire risk, but also of the financial burden(s) of higher real estate taxes, possibly higher insurance premiums, and higher maintenance of continued mitigation during the time the property is owned. Additional disclosures provided by the insurance industry on the need to be careful in carrying the right amount of insurance,
etc, would be able to be provided to any potential purchaser at this time.

* Mitigation:

* The second mandatory requirement engages when a property ownership title changes through a sale of the property. The sale and subsequent transfer of the title would be dependent upon the certification that the property meets certified defensible space standards.
* If the property does not meet defensible space standards, a mitigation plan would be prepared, implemented, completed and certified before the property transfer could be consummated.