New NJ Law Requiring Disclosure of Flood Risks Takes Effect

In response to the growing threat of flooding within New Jersey, on July 3, 2023, the New Jersey flood risk notification law was enacted to require landlords and sellers of real estate to make certain disclosures regarding known and potential floods risks.  The law took effect on March 20, 2024. Under the law, every landlord must notify prospective tenants whether the subject property is in a FEMA Special Flood Hazard Area or in a Moderate Flood Hazard Area and disclose actual knowledge of flooding at the Property.  You can determine if your property is in a FEMA Special Flood Hazard Area or Moderate Flood Hazard Area by searching on the DEP’s online search tool.  Tenants must be provided with the required notices prior to the time that the lease for the property is signed.   For residential leases, the Notice must be on a separate rider, individually signed by the tenant, and written in not less than a 12-point typeface.  The model notice prepared by the New Jersey Department of Community Affairs may be found here. In addition to the notice requirements, every residential lease must include the following language:

Flood insurance may be available to renters through FEMA’s National Flood Insurance Program to cover your personal property and contents in the event of a flood. A standard renter's insurance policy does not typically cover flood damage. You are encouraged to examine your policy to determine whether you are covered.

If a landlord (including commercial landlord) fails to comply with the notification requirements, a tenant may terminate the lease if the property is ultimately found to be in a FEMA Special Flood Hazard Area or Moderate Flood Hazard Area.  Further, if a tenant was not notified pursuant to the law, and was damaged by flooding, the tenant may also seek damages against the landlord. The new law also impacts Sellers of commercial or residential real estate.  Similar to the disclosure obligation of landlords, sellers of real estate must disclose, on a property condition disclosure statement, whether the property is located in a FEMA Special or Moderate Risk Flood Hazard Area and whether the sellers have actual knowledge of flood risks to the property.  A purchaser is not obligated under any contract for the purchase of real estate until such disclosure is made. If you have questions regarding New Jersey's flood disclosure requirements, contact one of our attorneys today.