New Jersey landlords must disclose prior flooding under bill passed by Legislature

A bill passed by the New Jersey Legislature last week would give renters and homebuyers the right to know if their prospective home has flooded previously.

The legislation — which still awaits Gov. Phil Murphy’s signature — would mandate landlords and realtors selling homes to disclose whether the property is in a 100-year floodplain or 500-year floodplain, as determined by the Federal Emergency Management Agency. They’ll also have to say if — and how often — the property or its parking lot has incurred flood damage.

The measure was proposed after the remnants of Hurricane Ida inundated parts of the state and killed 30 people. It was backed by environmental advocates and landlord and real estate associations.

“As we brace for sea level rise and inland flooding, this landmark piece of legislation will provide necessary transparency for homebuyers and renters,” Peter Kasabach, executive director of the nonprofit New Jersey Future. “In a highly developed, coastal state like New Jersey, we know the impacts of coastal and inland flooding will threaten housing stock across the state.”

The bill was introduced last fall, a year after Ida, and cleared the Legislature by March. But Murphy conditionally vetoed the measure, asking lawmakers to tighten penalties on landlords who failed to comply.

Under the amended version that passed the state Senate and Assembly in June, tenants have a right to immediately terminate their lease without a penalty if they find out their landlord failed to disclose their unit is in a flood zone. Tenants also have the right to sue for damages if their residence is flooded and the landlord did not disclose the property resides in a floodplain.

As part of the bill, the state Department of Environmental Protection will also launch a searchable website for landlords to check whether a property is in a flood zone or at risk of flooding in the future.

Advocates of the bill said these protections are urgent as climate change threatens more frequent and worsening flooding. They said New Jersey lags behind other states who already have flood disclosure laws. The measure, if signed, would make New Jersey the 30th state with such rules.

A July 2022 report commissioned by the Natural Resources Defense Council found nearly 8,000 New Jersey homes that previously flooded were purchased in 2021. The report said the average homebuyer of a previously flooded property in the state can expect to sustain about $25,000 in damages over a 15-year period. That goes up to $50,000 over a 30-year period, the report found.

In New York, home sellers are required to inform a potential buyer whether a property is in a floodplain and lawmakers recently closed a loophole that allowed a seller to pay a $500 credit to the buyer to avoid disclosing a property’s flood history, according to the nonprofit Waterfront Alliance.

If Murphy signs New Jersey’s disclosure bill, landlords would have 90 days to begin disclosing flood damage on new leases or renewals.

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