CSG Law Alert: New Law Requires Sellers of Real Property and Landlords to Disclose Flood Risks
Sellers of real property and landlords in New Jersey will soon be required to disclose flood risks to purchasers and new tenants.
On July 3, 2023 Governor Murphy signed bill S3110/A4783, which requires sellers of real property to disclose whether the property is located in a FEMA special flood hazard area (the 100-year floodplain) or moderate risk flood hazard area (the 500-year floodplain) and any actual knowledge of the seller concerning flood risks at the property. Among other new requirements, sellers are also required to disclose whether flood insurance is required for the property. As part of the new law, the New Jersey Department of Community Affairs will update the property condition disclosure statement to include the new required disclosures.
Landlord disclosure requirements will be similar. New leases with terms of 120 days or more will be required to disclose whether the property is in a special or moderate risk flood hazard area, whether the rental premises or any portion of the parking area has ever experienced any flood damage, and that flood insurance may be available to cover personal property. The disclosures will be set forth in a model disclosure form to be published by the New Jersey Department of Community Affairs.
To assist landlords, the New Jersey Department of Environmental Protection will also be required to develop a website that provides a look-up tool searchable by mailing address that identifies if a property is in a FEMA flood risk area. Tenants will be empowered to terminate a lease if the landlord fails to disclose that a rented property is within a FEMA flood risk area. In addition, a tenant may pursue all legal remedies for flooding that damages personal property, affects the habitability of the leased premises, or affects the tenant’s access to the leased premises, based on the landlord’s “failure to disclose critical information.”
The disclosure requirements relating to the sale of real property will become effective 90 days after publication of a revised property condition disclosure statement on the Department of Community Affairs website. The landlord disclosure requirements will become effective 90 days after publication of a model notice in the New Jersey Register by the Department of Community Affairs. After the effective dates, the requirements to disclose whether the property is within a flood hazard area will not take effect until the DEP has created a website lookup tool.