BEWARE: As of March 20, 2024, The State of New Jersey’s New Flood Condition Disclosures & Landowner Notification Law is Now in Effect!

Welcome to the latest entry on the Corporate America Realty & Advisors blog, where we delve into significant legal changes affecting property owners, brokers, tenants, and purchasers within the real estate landscape. Today, we’re discussing a pivotal update in New Jersey law, effective March 20, 2024, that mandates comprehensive flood condition disclosures for various real estate transactions. This article represents our interpretation of the new legislation—namely, the law codified at P.L. 2023, c.93—and is intended to offer insights rather than legal advice. We strongly encourage each party to engage with their legal and professional advisors to navigate the intricacies of this law according to their unique circumstances.

From this point forward, all parties involved in leasing (inclusive of renewals) or selling real property in New Jersey, including commercial real estate, are required to inform potential tenants and buyers about the property’s historical and potential flood conditions. This directive stems from a broader initiative to enhance transparency and safety in real estate transactions, addressing the increasing concern over flood risks.

For those entering lease agreements, a specific disclosure form, accessible here, must be completed. These forms aim to standardize the disclosure process and ensure that all relevant flood risk information is communicated effectively.

Key highlights of this mandate include:

  1. Flood Hazard Areas Disclosure: Both disclosure forms necessitate the identification of the property’s location relative to the FEMA Special Flood Hazard Area (the “100-year floodplain”) and the Moderate Risk Flood Hazard Area (the “500-year floodplain”). Property owners can verify their flood hazard status by consulting the Flood Risk Database.
  2. Historic Flooding: The forms also require disclosing past flooding events affecting the property. However, the extent of the historical data review necessary for this disclosure remains to be clarified by the New Jersey Department of Community Affairs (DCA).
  3. Incorporation into Existing Disclosure Statements: For sale transactions, a “Flood Risk” section has been added to the existing Seller’s Property Condition Disclosure Statement, expanding its scope to include commercial real estate transactions alongside residential sales.

As this new law is now in effect, property owners and managers, particularly of commercial entities, should proactively review their portfolios. This includes determining if any property falls within the specified floodplains by consulting the Flood Risk Database and gathering relevant information on past flooding events. Although detailed compliance guidelines are pending from the DCA, adopting a thorough approach to these disclosures is advisable to mitigate potential legal and financial repercussions.

  • For lease transactions, the disclosure form from the State of New Jersey Department of Community Affairs can be found here.
  • The disclosure form for sale transactions from the State of New Jersey’s Consumer Affairs Department can be found here.

It’s crucial to note the severe consequences of non-compliance. For instance, a tenant may terminate their lease upon discovering the landlord’s failure to fulfill the disclosure requirements. Similarly, a seller’s non-compliance in real estate sales could legally absolve purchasers of their contractual obligations.

This legislation significantly shifts towards increased diligence and transparency in the New Jersey real estate market. While the path to full compliance might seem daunting, understanding and adhering to these requirements is essential for mitigating risk and fostering trust in real estate transactions.

Again, we emphasize the importance of consulting with legal and professional advisors to ensure your actions align with the law’s expectations. Stay informed and compliant; we’re always here to navigate these changes alongside you.

Corporate America Realty & Advisors provides our clients with individual building/property specifications and property site data reports for their review.

Our database contains every Industrial and Commercial property in the State of New Jersey, whether it is improved with a building(s0) or is unimproved or approved land/site.

Customized property reports that can help with the “due diligence,” evaluation, and information gathering for a property or site are now available from us (delivered via (PDF) within 24 hours).

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