New Flood Disclosures Required for New Jersey Residential and Commercial Property Sales and Leases

By  Melanie J. Scroble and Jonathan D. Sherman

In addition to the many representations and warranties New Jersey property owners must provide when they seek to sell or lease their property, they will now need to make specific disclosures regarding the history of and potential for flooding on their land. As of March 20, 2024, P.L. 2023, c.93 requires all New Jersey residential and commercial property owners in the state to provide detailed disclosures regarding past flooding and existing and future flood risks when entering into new leases, lease renewals, sales, or exchanges involving their property. Failure to make these disclosures in any transaction  entered into after March 20th can have severe and costly consequences for sellers and landlords.

Under the new law, property owners must make these disclosures in one of two amended disclosure forms, depending on whether the transaction involves a sale or a lease.

For flooding issues, the primary responsibility of owners entering into either type of transaction involves: 

  • Disclosing whether the property has ever experienced flood damage, water seepage, or pooled water due to a natural flood event on the property, such as heavy rainfall, coastal storm surge, tidal inundation, or river overflow.
  • Determining and disclosing whether any or all of the property is located wholly or partially in the Special Flood Hazard Area (“100-year floodplain”) according to FEMA’s current flood insurance rate maps for the area or whether any or all of the property located wholly or partially in a Moderate Risk Flood Hazard Area (“500-year floodplain”) according to FEMA’s current flood insurance rate maps for the area. Owners can find this information in the New Jersey Department of Environmental Protection’s Flood Risk Database.

The form for sale transactions includes additional disclosures regarding flood insurance and claims, as well as disaster flood assistance. 

Consequences of Non-Compliance

For landlords, failing to disclose that the leased property is located in a FEMA Special or Moderate Risk Flood Hazard Area gives the tenant the right to terminate the lease upon learning the property is, in fact, located in one of those hazard areas. Additionally, the landlord may be held liable for any damage to a tenant’s personal property, diminished habitability of the leased premises, or limited or denied access to the leased premises due to flooding.

Similarly, a seller’s failure to make the necessary disclosures will release the buyer from its obligations under the sale contract unless and until the seller complies with the law’s disclosure requirements.

If you have questions or concerns about these new required flood disclosures, please contact Melanie Scroble or Jonathan Sherman at Ansell.Law.