Pivotal Changes Happening Amid Lame-Duck Session

By Douglas Tomson, Vice President Of Government Affairs

Every two years, the New Jersey legislature session ends on the second Tuesday in January. The time between the November election and that Tuesday, known as the lameduck session, is usually a feverish race to the finish line to pass bills and allow members of the legislature who are not returning to work on projects that are close to them. As we do anytime the State Legislature meets, in the recent lameduck session, New Jersey Realtors® played a pivotal role in advocating for real estate related issues.

Amidst the flurry of legislative activity, three significant issues of importance to New Jersey Realtors® saw action: the Flood Disclosure Law, Solar Panel Disclosure, and the Lawn Sprinkler Bill. Let’s take a deep look into the effects they may have on real estate in the Garden State.

Flood Disclosure Law/Seller Property Disclosure Form

Last year, NJ Realtors® Government Affairs Department presented testimony before the NJ Senate Environment and Energy Committee regarding S-3110 which mandates sellers and landlords to disclose information concerning flooding. Working closely with Sen. Bob Smith, of District 17 and the bill’s sponsor, and engaging with various stakeholders, we secured amendments ensuring the disclosure process for sellers remained reasonable. It’s important to note seasonal rentals are excluded from the bill’s provisions.

Under this newly enacted law, property sellers and landlords are obligated to inform prospective buyers and tenants about a property’s flooding history, flood risk, and its designation within a flood zone. Although the new disclosure form through the Division of Consumer Affairs is already available, it will not be mandatory until March 20.

NJ Realtors® plans to update the Seller’s Property Condition Disclosure Statement accordingly and notify our members promptly. In addition, a new notice to tenants has been released by the Department of Community Affairs, which will go into effect on March 20. This notice was adopted by emergency by the DCA.

Solar Panel Disclosure

As New Jersey residents keep striving to be more environmentally conscious, more and more solar panels have appeared on residential homes. In some cases when there are problems with the panels, it can prove to be difficult if the installation company is no longer in business.

To address that, A-4522 mandates disclosures when selling a single-family home with solar panels. The bill stipulates the contract of sale, rider, contract addendum, or property condition disclosure statement must contain specific information about the solar panels.

NJ Realtors® Government Affairs Department secured amendments so real estate licensees are not held accountable for the required disclosure when the seller fails to provide the necessary information. The law is set to take effect upon the publication of information by the Real Estate Commission.

Residential Lawn Sprinkler Bill

Some bills take a little time to become law. A-1755, which New Jersey Realtors® successfully opposed for over 17 years, requires automatic rain sensors/smart sprinklers to be installed as a time-of-sale requirement.

Amendments secured by New Jersey Realtors® allow funds to be held in escrow so closings can proceed even if rain sensors or smart sprinklers are not installed, while also delaying the requirement for contracts of sale to contain provisions pertaining to this law for a period of three years. What’s important to know is every lawn sprinkler system for residential homes installed after Sept. 8, 2000, is already required to have a sensor installed. This bill would apply to those properties with lawn sprinklers installed before 2000.

In addition, landscape irrigation contractors are required to notify their clients of the requirements of the new law within 60 days of the law being signed and cannot perform work on a system until one is installed. This will ensure homeowners are aware of these requirements well before the time-of-sale requirement takes effect in three years.

New Jersey Realtors® is actively working on updating its forms and contracts in accordance with these new laws and will update members as soon as they are available.