Last year, the Governor signed into law, the Flood Risk Notification Law. This law affects both sellers and landlords of residential and commercial property. It requires them to provide notice of flood prone areas to purchasers prior to when a transaction becomes binding and prior to when a tenant signs a lease or upon lease renewal, if the person is already a tenant.
This article will focus on a landlord’s obligation under the new law, N.J.S.A. 46:8-50. Landlords are required to disclose whether a property is in a FEMA Special Flood Hazard area (a FEMA designated 100-year flood plain), or a Moderate Risk Flood Hazard Area (a FEMA designated 500-year flood plain), and if the landlord has actual knowledge of any flooding of the rental premises or any portion of the parking areas.
Beginning March 20, 2024, notification is required prior to lease signing or upon lease renewal. If there is a written lease, the notification can be included in the written lease or renewal lease. In the case of a residential lease, the notice must be contained in a separate rider, individually signed or acknowledged by the tenant and written in not less than 12 point type face. Click the link HERE for the Rental Flood Risk Model Notice.
This Notice was published by the New Jersey Department of Community Affairs (DCA). The DCA also published an updated Seller’s Property Condition Disclosure Form that sellers can use to notify purchasers.
To learn more information about the law, go to flooddisclosure.nj.gov. In addition, the New Jersey Department of Environmental Protection (DEP) developed a tool to assist with compliance with the law. The Department of Environmental Protection created an online tool searchable by mailing address to determine if property is in a FEMA-designated Special or Moderate Flood Hazard Area. This tool is located on the website listed above.
The Flood Risk Notification Law applies to sellers of real property and residential and commercial landlords who rent property for a least one month. The law does not apply to residential units with two units or less, or owner occupied units of not more than three units. Hotels, motels, and seasonal rentals of less than 120 days are also exempt from the statute.
In addition, the new law requires landlords of residential property to provide the following notice to tenants regarding flood insurance: “Flood insurance may be 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 if you are covered.”
Under the Flood Risk Notification Law, if a landlord fails to disclose that the property is located in the FEMA Special or Moderate Risk Flood Hazard Area and a tenant subsequently becomes aware that the property is located in the FEMA Special or Moderate Risk Flood Hazard Area, a tenant can terminate the lease by giving a written notice of termination to the landlord. If a landlord violates the law 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 tenant may pursue all legal remedies under the law to recover damages recognizing the landlord’s failure to disclose critical information.
If the lease is terminated by the tenant, the landlord must refund to the tenant any monies the tenant paid in advance after the effective date of termination of the lease within 30 days after the effective date of termination of the lease. Under the law, termination of the lease is effective when the tenant surrenders possession of the leased premises.
Prior to enactment of this law, landlords were only required to notify tenants as to whether the apartment and parking areas of the building and premises was located in a flood zone. Therefore, when amending your lease, be sure to remove that provision and include the Rental Flood Risk Model Notice and include the notification regarding flood insurance.
This information is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable to all situations and should not be acted upon without specific legal advice based upon particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.