New Jersey Implements Flood Risk Disclosure Law for Real Estate Transactions

In a significant step towards enhancing transparency and safety in real estate transactions, New Jersey has implemented a new law requiring the disclosure of flood risks and history to prospective renters and purchasers of both residential and commercial properties. This law, which came into effect on Wednesday, March 20, was signed by Governor Phil Murphy in response to the increasing frequency and intensity of flooding events in the state. Sellers and landlords, previously not obligated to disclose such information, must now provide details of a property’s flood history and its location relative to FEMA Flood Hazard Zones before the signing of sales contracts, leases, and lease renewals.

To facilitate compliance, New Jersey has updated its property condition disclosure statement for sellers and created a notice template for landlords to use. Additionally, the state launched an internet look-up tool, allowing individuals to identify properties within flood hazard areas easily. This move comes amid warnings from environmental experts about the rising risks of permanent coastal flooding, projected to affect around 40,000 properties by 2050 due to sea-level rise.

The law’s introduction aligns with efforts to better equip homeowners and renters with essential information for making informed decisions regarding property investments and rentals, especially in light of past devastations caused by major storms such as hurricanes Floyd, Irene, and Ida. With exemptions for certain types of dwelling units and short-term accommodations, the law aims to balance practicality with protection.

Furthermore, New Jersey is undertaking significant flood mitigation efforts, including property buyouts in flood-prone areas and launching large-scale flood control projects in Hoboken and the Meadowlands region, costing nearly $298 million. These initiatives are complemented by federal plans to enhance flood defenses across the state, highlighting a comprehensive approach to managing flood risks.