At a Glance

• New Jersey Gov. Phil Murphy signed bill S3110/A4783 earlier this month requiring landlords and sellers of real property to make certain disclosures regarding a property’s flood risk and flood history.
• This new law requires commercial landlords and certain residential landlords to disclose in writing to their tenants whether the relevant property is located in the FEMA special flood hazard area (100-year floodplain) or moderate risk flood hazard area (500-year floodplain).

Earlier this month, New Jersey Gov. Phil Murphy signed bill S3110/A4783 into law which requires landlords and sellers of real property to make certain disclosures regarding the property’s flood risk and flood history. The new law amends and supplements N.J.S.A. 46:8-50.

This new law requires commercial landlords and certain residential landlords to disclose in writing to their tenants whether the relevant property is located in the FEMA special flood hazard area (100-year floodplain) or moderate risk flood hazard area (500-year floodplain). In addition, landlords must disclose whether the premises or any portion of the parking areas on the property ever experienced any flood damage, water seepage or pooled water due to a natural flood event. Residential landlords must provide a specifically enumerated disclosure regarding the availability of flood insurance and the limitations of renter’s insurance. It is critical to note that these disclosures must be made in writing and must be made prior to the execution of a new lease or extension of an existing lease. The failure of a landlord to comply with this law may give rise to the right to terminate the lease, as well as expose the landlord to liability for damages suffered by the tenant.

Sellers of real property are required to make similar disclosures to their purchasers regarding whether the property is located in the FEMA special flood hazard area or moderate risk flood hazard area. Additionally, the Department of Community Affairs, in consultation with other governmental agencies and the New Jersey Real Estate Commission, is required to add language to the property condition disclosure statement concerning certain flood risks. These disclosures must be in writing and must be made to a purchaser prior to the purchaser becoming obligated under a contract for the purchase of the property.

The law further requires the Division of Consumer Affairs, Department of Environmental Protection and Department of Community Affairs to develop a form notice, as well as a website where tenants and purchasers may research whether the property in question is located in the FEMA special flood hazard area or moderate risk flood hazard area. The obligation of landlords and sellers to make the disclosures required by this new law is phased-in and tied to the creation of the form notices, disclosures and web-based look up tool by the various governmental agencies.

The real estate attorneys and professionals at Faegre Drinker are ready to help you in understanding and complying with this new law.