Home buyers and tenants will hopefully soon be assured better protection on their biggest financial investment (their home) under a bill (S-3110) the New Jersey State Senate today voted to pass which would require sellers and landlords to make certain written disclosures regarding flooding damage before any contracts are signed.
Under the bill, property sellers and landlords would be required to disclose on a property condition disclosure statement which is to be promulgated by the Department of Community Affairs (“DCA”) whether the property is located in the FEMA Special or Moderate Risk Flood Hazard Area and any actual knowledge concerning flood risks of the property.
One of the questions on the disclosure statement is to be "Has the property experienced any flood damage, water seepage, or pooled water due to a natural flood event, such as heavy rainfall, costal storm surge, tidal inundation, or river overflow? If so, how many times?"
The bill would also require landlords to notify tenants of the availability of insurance available for renters through the National Flood Insurance Program.
The bill provides that if a landlord violates this law, and a tenant suffers a substantial loss or damage to their personal property as a result of flooding, the tenant may terminate the lease by giving a written notice of termination to the landlord not later than the 30th day after the date the loss or damage occurred. The landlord would be required to refund to the tenant, within 30 days, all rent paid in advance under the lease for any period after the effective date of the termination of the lease.
The tenant may also pursue all legal remedies under the law to recover damages recognizing the landlord’s failure to disclose critical information.
It is worth noting that the bill does not expressly provide a remedy against a realtor if the realtor (acting as the agent for landlord or seller) fails to comply with the proposed required notification.
For the purposes of this section, "landlord" means any person who rents or leases, for a term of at least one month, commercial space or residential dwelling units other than dwelling units in a premises containing not more than two such units, or in an owner-occupied premises of not more than three dwelling units, or in hotels, motels, or other guest houses serving transient or seasonal guests defined as those who rent a property for a period of less than 120 days.
The bill is primarily sponsored by Senators Bob Smith and Richard Codey.
A sister bill (A4783) is in second reading in the Assembly. It is sponsored by Assembly Members Annette Chaparro, James Kennedy, and John McKeon.
If passed by the Assembly and signed by Governor Phil Murphy, the DCA would be required to adopt rules and regulations to implement the bill's provisions within 90 days after its enactment.
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