New Jersey-2022-S3110-Amended

An Act concerning real property and flood notifications, amending P.L.2001, c.313, and supplementing P.L.1960, c.39 (C.56:8-1 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.2001, c.313 (C.46:8-50) is amended to read as follows:

1. a. Every landlord shall notify each of the landlord's tenants [upon the event that the rental property which is the subject of a lease has been determined to be located in a flood zone or area] ²[whether the rental property, which is the subject of a lease, has been or could be affected by flooding] prior to lease signing or renewal, whether a property is located in the FEMA Special Flood Hazard Area ("100-year floodplain") or Moderate Risk Flood Hazard Area ("500-year floodplain") and if the landlord has actual knowledge that the rental premises or any portion of the parking areas of the real property containing the rental premises has been subjected to flooding². Seasonal rentals of less than 120 days shall be exempt from the requirements of this section. Each new tenant shall be [notified] provided the notices required pursuant to this section in writing ²[at the time of application]² and prior to the time [that occupancy] that the lease of the rental unit is [assumed] signed. ²If the lease is in writing, the notice required under this subsection may be included in the written lease or the written renewal lease, provided that ⁴, in the case of a residential lease,⁴ the notice is a separate rider, individually signed or otherwise acknowledged by the tenant, and written in not less than 12-point typeface.²

b. The Department of Community Affairs ³, in consultation with the Department of Environmental Protection,³ shall ³[promulgate] develop³ ⁴and published on its website and in the New Jersey Register⁴ a ²[form] model notice² to be used by landlords pursuant to this section. The ²[form] model notice² shall contain the heading "Flood Risk" and contain questions, and space for landlords to answer yes, no, or unknown ², based upon the landlord's actual knowledge. The questions regarding the property being located in a FEMA Special or Moderate Risk Flood Hazard Area shall not contain the option for unknown². The ²[form] model notice² ¹[provide] shall include¹ the following information in substantially similar language:

(1) ²[Is any or all of the rental property ¹[is]¹ located in a Federal Emergency Management Agency (FEMA) designated floodplain ¹?¹ ;

(2)]² Is any or all of the rental property ¹[is]¹ located wholly or partially in the Special Flood Hazard Area ("100-year floodplain") according to FEMA's current flood insurance rate maps for the leased premises' area ¹?¹ ;

²[(3)] (2)² Is any or all of the rental property ¹[is]¹ 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 leased premises' area ¹?¹ ; and

²[(4)] (3)²Has the rental ²[property] premises or any portion of the parking areas of the real property containing the rental premises subject to the lease² ever experienced any flood damage, water seepage, or pooled water due to a natural flood event²[, such as heavy rainfall, coastal storm surge, tidal inundation, or river overflow.] ?² If so, how many times?

c. Every residential lease shall also contain the following notice to tenants: "Flood insurance ⁴[is] may be⁴ available to renters through FEMA's National Flood Insurance Program to cover your personal property and contents in the event of a flood. A standard renter's insurance policy does not typically cover flood damage. You are encouraged to examine your policy to determine whether you are covered."

d. The Department of Community Affairs, in consultation with the Department of Environmental Protection, shall create and prepare a notification that Statewide flood risks are increasing and that the tenant may review these risks by going to the website that the Department of Environmental Protection shall ensure is managed with current and scientifically-supported information, which is linked to and published on the website of the Department of Community Affairs. ²The Department of Environmental Protection's website shall at a minimum include information that helps property owners provide the disclosures enumerated in this section. The website shall include access to a user-friendly look-up tool searchable by mailing address that identifies if a property is in the FEMA Special or Moderate Risk Flood Hazard Area. The requirement to disclose if the property is in the FEMA Special or Moderate Risk Flood Hazard Area, beyond actual knowledge, shall take effect after the website look-up tool is in place.²

e. If a landlord violates this section ⁴by failing to disclose that the property is located in the FEMA Special or Moderate Risk Flood Hazard Area⁴ and a tenant ⁴[suffers a substantial loss or damage to the tenant's personal property as a result of flooding] subsequently becomes aware that the property is located in the FEMA Special or Moderate Risk Flood Hazard Area⁴, the tenant may terminate the lease by giving a written notice of termination to the landlord ⁴[not later than the 30th day after the date the loss or damage occurred and] . If a landlord violates this section and flooding occurs that results in damage to a tenant's personal property, affects the habitability of the leased premises, or affects the tenant's access to the leased premises, the tenant⁴ may pursue all legal remedies under the law to recover damages recognizing the landlord's failure to disclose critical information. ⁴[For purposes of this subsection, a tenant suffers a substantial loss or damage to personal property if the total cost of repairs to or replacement of the personal property ²[is 50 percent or more of the personal property's market value] exceeds five times the monthly rent² on the date the flooding occurred.]⁴ Termination of a lease under this subsection is effective when the tenant surrenders possession of the dwelling.

f. Not later than the 30th day after the effective date of the termination of a lease under subsection f. of this section, the landlord shall refund to the tenant all rent or other amounts paid in advance under the lease for any period after the effective date of the termination of the lease.

g. 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.

(cf: P.L.2001, c.313, s.1)

2. (New section) a. A seller of real property located in this State shall disclose, on the property condition disclosure statement, ²whether the property is located in the FEMA Special or Moderate Risk Flood Hazard Area and² any actual knowledge of the seller concerning flood risks of the property, as required pursuant to this section, to the purchaser before the purchaser becomes obligated under any contract for the purchase of the property.

b. The Division of Consumer Affairs, in consultation with the ³Department of Environmental Protection,³Department of Community Affairs and New Jersey Real Estate Commission, in addition to any other question as the director deems necessary, shall add the following specific questions and information to the property condition disclosure statement concerning certain flood risks to a property being sold. ⁴The division shall revise the regulations promulgated pursuant to subsection c. of section 1 of P.L.1999, c.76 (C.56:8-19.1) with which the form of the property condition disclosure statement must comply to incorporate the requirements of this subsection, but in advance of such rulemaking the division shall make the revised form which includes the specific questions and information required by this subsection and subsection c. of this section, if applicable, available for use by publishing the revised form on the division's website. A seller of real property shall be required to use the revised form beginning on the 90th day following its publication on the division's website.⁴ The additions to the property condition disclosure statement shall contain the heading "Flood Risk" and contain questions, and space for sellers to answer yes, no, or unknown. If a seller answers yes to any question, the disclosure statement shall require the seller to explain the answer. The disclosure statement shall contain the following questions and explanatory language:

(1) ²[Is any or all of the property located in a Federal Emergency Management Agency (FEMA) designated floodplain?

(2)]² Is any or all of the property located wholly or partially in the Special Flood Hazard Area ("100-year floodplain") according to FEMA's current flood insurance rate maps for your area?

²[(3)] (2)² Is 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 your area?

²[(4)] (3)² Is the property subject to any requirement under federal law to obtain and maintain flood insurance on the property? Properties in the special flood hazard area, also known as high risk flood zones, on FEMA's flood insurance rate maps with mortgages from federally regulated or insured lenders are required to obtain and maintain flood insurance. Even when not required, FEMA encourages property owners in high risk, moderate risk, and low risk flood zones to purchase flood insurance that covers the structure and the personal property within the structure. Also note that properties in coastal and riverine areas may be subject to increased risk of flooding over time due to projected sea level rise and increased extreme storms caused by climate change which may not be reflected in current flood insurance rate maps.

²[(5)] (4)² Have you ever received assistance, or are you aware of any previous owners receiving assistance, from FEMA, the U.S. Small Business Administration, or any other federal disaster flood assistance for flood damage to the property? For properties that have received federal disaster assistance, the requirement to obtain flood insurance passes down to all future owners. Failure to obtain and maintain flood insurance can result in an individual being ineligible for future assistance.

²[(6)] (5)² Is there flood insurance on the property? A standard homeowner's insurance policy typically does not cover flood damage. You are encouraged to examine your policy to determine whether you are covered.

²[(7)] (6)² Is there a FEMA elevation certificate available for the property? If so, the elevation certificate must be shared with the buyer. An elevation certificate is a FEMA form, completed by a licensed surveyor or engineer. The form provides critical information about the flood risk of the property and is used by flood insurance providers under the National Flood Insurance Program to help determine the appropriate flood insurance rating for the property. A buyer may be able to use the elevation certificate from a previous owner for their flood insurance policy.

²[(8)] (7)² Have you ever filed a claim for flood damage to the property with any insurance provider, including the National Flood Insurance Program? If the claim was approved, what was the amount received?

²[(9)] (8)² ⁴[Is any or all of the property located in a designated wetland?

²[(10)] (9)²]⁴ 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?

c. The ³[Department of Community Affairs] Division of Consumer Affairs³, in consultation with the Department of Environmental Protection, shall include in the disclosure requirements and form to be distributed to purchasers of real property before the purchaser becomes obligated under any contract for the purchase of the property, that Statewide flood risks are increasing and that the purchaser may review these risks by going to the website that the Department of Environmental Protection shall create and ensure is managed with current and scientifically-supported information, and linked to and published on the website of the Department of Community Affairs. The Department of Environmental Protection's website shall at a minimum include information that helps property owners provide the disclosures enumerated in this statute. ²The website shall include access to a user-friendly look-up tool searchable by mailing address that identifies if a property is in the FEMA Special or Moderate Risk Flood Hazard Area. The requirement to disclose if the property is in the FEMA Special or Moderate Risk Flood Hazard Area, beyond actual knowledge, shall take effect after the website look-up tool is in place.²

¹3. (New section) ⁴[No later than 90 days after the date of enactment of this act, the] The⁴ Department of Community Affairs ⁴[shall] , the Department of Environmental Protection, and the Division of Consumer Affairs may⁴ adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), ⁴such⁴ rules and regulations ⁴as may be⁴ necessary to implement this act.¹

¹[3.] 4.¹ This act shall take effect ⁴[on] immediately, but section 1 of this act shall only be applicable to the signing or renewal of leases of rental property occurring on or after⁴ the 90th day next following the ⁴[promulgation of regulations implementing the requirements of this ¹[law] act¹ and ¹the¹ preparation of forms required to implement ¹[the law. The appropriate State entity shall have 90 days to publish regulations following enactment] this act, except that the Department of Community Affairs may take anticipatory administrative action, in advance thereof, as may be necessary for the implementation of this act¹.] publication of the model notice by the Department of Community Affairs pursuant to subsection b. of section 1, and section 2 of this act shall only be applicable to sales and exchanges of real property occurring on or after the 90th day next following the publication of the amended property condition disclosure statement by the Division of Consumer Affairs pursuant to subsection b. of section 2.⁴