By: Julia Snyder, JD Candidate, with assistance of Stephen McNally, Esquire and Paige M. Bellino, Esquire
Flood risks in New Jersey are on the rise due to the impacts of climate change. The New Jersey Legislature has responded with new legislation resulting in additional considerations for those engaged in the renting and selling of real estate. The coastal and inland areas of the Garden State are expected to continue experiencing significant flooding. The sea level around the Jersey Shore alone has risen about 18 inches since the early 1900s and is estimated to rise 0.9 to 2.1 feet between 2000 and 2050. To address the increasing flood risks associated with the State, New Jersey Governor Phil Murphy signed bill S3110/A4783 into law which requires landlords and sellers of real property to make certain disclosures to tenants/purchasers regarding flood risk and flood history.
Effective March 20, 2024, the law amends, and supplements N.J. Stat. Ann. §§ 46:8-50, 56:8-19.2 (West 2023), and requires that all landlords starting or renewing any commercial or residential leases and all sellers of commercial or residential property disclose flood risk information with respect to the subject property. The new Statute requires commercial landlords and certain residential landlords to disclose to their tenants whether the relevant property is in the FEMA special flood hazard area (100-year floodplain) or moderate risk flood hazard area (500-year floodplain). The landlords must also disclose if the premises or portions of the parking areas ever experienced flood damage, water seepage, or pooled water due to natural flood events. Furthermore, these disclosures must be made in writing, prior to the execution of a new lease or extension of an existing lease. Sellers of real property are required to make similar disclosures to their purchasers in the contract of sale regarding the location of the property in either of the above-mentioned hazard areas
The disclosure requirements apply to all leases for a term of at least one month. However, exemptions apply to properties containing not more than two dwelling units, dwelling units in an owner-occupied property of not more than three dwelling units, or dwelling units in hotels, motels, or other guest houses serving transient or seasonal guests for a period of less than 120 days. The law also mandates certain governmental agencies provide resources to aid in the disclosures. The Department of Community Affairs posted a model notice to be used by landlords to inform their tenants of the flood risks. For sellers, the Division of Consumer Affairs released an updated version of the New Jersey’s Seller’s Property Condition Disclosure Statement which includes a new “Flood Risk” section. Lastly, in determining which hazard area a subject property is in, sellers and landlords may utilize the Flood Risk Notification Tool created by the Department of Environmental Protection.
A landlord’s non-compliance with the law may permit the tenant the right to terminate the lease and subject the landlord to monetary damages. Unlike for rentals, the flood disclosure requirements do not incorporate specific rights or remedies for purchasers who may have suffered due to the non-disclosure of their respective sellers; however, seller could be subject to fraud claims.
Prior to the new Law, sellers and landlords were not obligated to disclose a property’s flood history. The new Law offers protection to consumers by way of information to assess the potential risks and costs associated with flood-prone property. Governor Murphy emphasized the importance of this change, stating, “As we continue to live with the impacts of climate change in our communities, it’s essential that we inform prospective homebuyers and renters of the risks in areas where they are looking to settle down.” Whether you are a landlord, buyer, or seller, our professionals at McNally & Bellino, LLC are ready and willing to advise you on your rights and protections afforded under the new Law.