Earlier this year, New Jersey adopted a law mandating notices of flood prone areas in real estate transactions.  Every landlord must notify their tenant before lease renewal or execution, of whether the leased premises are located in the Federal Emergency Management Agency Special Flood Hazard Area or Moderate Risk Flood Hazard Area, and whether the landlord knows that the leased premises or parking areas has flooded in the past. There are exceptions for one and two family homes, for three family homes occupied by the owner, and for specific short term rentals.  The Department of Community Affairs will be publishing a model notice that may be completed and attached to the lease.  The notice must also advise the tenant of the availability of flood insurance.
The notice requirement is not effective until after the State makes the model notice available, and until the Department of Environmental Protection develops a website allowing landlords to look up their property to see if it is in either of the hazard areas.  Landlords are obligated to disclose now whether the leased premises and parking has flooded.

Any landlord who fails to include the notice in the lease may have the lease terminated by the tenant, and may also be liable for any flood damage incurred by the tenant.

For real estate sales involving the use of a property condition disclosure statement (which is not currently mandatory under New Jersey statutes), that statement must contain similar disclosures to that imposed on landlords.  That language will also be promulgated by the State after which time its use will be required in those statements.  Undoubtedly, realtors will try to include such a notice to protect themselves in contracts that they prepare for use by homebuyers and sellers.  The flood notice law does not impose any penalty on sellers who fail to make disclosure of flood hazard areas.

Real estate lawyers and professionals will be dealing with the fallout from these new requirements.  Do not hesitate to contact me if you have any questions regarding this.

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Charles D. Whelan III has been committed to excellence for over 30 years. With offices located centrally in New Jersey, he is able to provide businesses and individuals with excellent legal services.

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