In a prior blog, we let you know that the State of New Jersey had adopted flood notice legislation pertaining to real estate sales and leases and that we would let you know when more details were available.
The law is now in effect. Many real estate leases and all real estate contracts must contain specific flood disclosures. The law specifically requires the disclosure of whether a particular property is in a FEMA Special Flood Hazard Area or Moderate Risk Flood Hazard Area. That first requires the seller or landlord to look up the property on the NJDEP website.
Then the landlord must prepare the flood notice for attachment to the lease before the tenant can sign it. The notice is available on line.
For property sellers, a property condition disclosure statement (PCDS) must be prepared and completed.
That document is also on line. It should be noted that historically a PCDS was never mandatory in New Jersey and only promoted by a couple of national real estate offices as a way of insulating their agents from liability.
The problem with PCDS is that sellers may be less than exacting in answering the many questions, and later, whatever the seller has answered can be used as evidence against the seller in potential litigation regarding the transaction. I understand that is a very tiny percentage of all transactions but I do not want my clients exposing themselves to liability. I have seen disgruntled homebuyers claim fraud against home sellers based on their answers to the disclosure questions. Therefore, we will be advising our clients to complete only the Flood Risk section of the PCDS in connection with the sale of their homes.
Call us any time for experienced New Jersey real estate counsel.
