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55 N.J.R. 590(a)

VOLUME 55, ISSUE 7, APRIL 3, 2023

RULE PROPOSALS

Reporter

55 N.J.R. 590(a)

NJ - New Jersey Register  >  2023  >  APRIL  >  APRIL 3, 2023  >  RULE PROPOSALS  >  LAW AND PUBLIC SAFETY -- DIVISION OF CONSUMER AFFAIRS

Interested Persons Statement

INTERESTED PERSONS

Interested persons may submit comments, information or arguments concerning any of the rule proposals in this issue until the date indicated in the proposal. Submissions and any inquiries about submissions should be addressed to the agency officer specified for a particular proposal.

The required minimum period for comment concerning a proposal is 30 days. A proposing agency may extend the 30-day comment period to accommodate public hearings or to elicit greater public response to a proposed new rule or amendment. Most notices of proposal include a 60-day comment period, in order to qualify the notice for an exception to the rulemaking calendar requirements of N.J.S.A. 52:14B-3. An extended comment deadline will be noted in the heading of a proposal or appear in a subsequent notice in the Register.

At the close of the period for comments, the proposing agency may thereafter adopt a proposal, without change, or with changes not in violation of the rulemaking procedures at N.J.A.C. 1:30-6.3. The adoption becomes effective upon publication in the Register of a notice of adoption, unless otherwise indicated in the adoption notice. Promulgation in the New Jersey Register establishes a new or amended rule as an official part of the New Jersey Administrative Code.

Agency

LAW AND PUBLIC SAFETY > DIVISION OF CONSUMER AFFAIRS

Administrative Code Citation

 Proposed Amendment: N.J.A.C. 13:45A-29.1

Text

 Property Condition Disclosure Form

Authorized By: New Jersey Division of Consumer Affairs, Cari Fais, Acting Director.

Authority: N.J.S.A. 56:8-1 et seq., specifically 56:8-19.1.

Calendar Reference: See Summary below for explanation of exceptions to calendar requirement.

Proposal Number: PRN 2023-025.

Submit written comments by June 2, 2023, to:

Cari Fais

Acting Director

New Jersey Division of Consumer Affairs

124 Halsey Street

PO Box 45027

Newark, New Jersey 07101

 or electronically at: http://www.njconsumeraffairs.gov/Proposals/Pages/default.aspx.

The agency proposal follows:

 Summary

 The property condition disclosure statement at N.J.A.C. 13:45A-29.1(d) provides homebuyers with information regarding the condition of real estate that allows buyers to make more informed decisions. N.J.A.C. 13:45A-29.1(c) specifies the obligations of licensees in regard to disclosure and actions they must take to avoid liability for communicating false, misleading, or deceptive information. The Division of Consumer Affairs (Division) is proposing amendments at N.J.A.C. 13:45A-29.1 to implement P.L. 2021, c. 264, and P.L. 2021, c. 442, which amended the law governing the use of the property condition disclosure statement.

 P.L. 2021, c. 264 mandates that the property condition disclosure form include a question specifically concerning the presence of lead plumbing in a residential property. The Division proposes to amend N.J.A.C. 13:45A-29.1(d) by adding a new question to the Seller's Property Condition Disclosure Statement to ascertain whether the seller is aware of the presence of any lead piping on the property, including any service line, piping materials, fixtures, and solder.

 P.L. 2021, c. 442 amends N.J.S.A. 56:8-19.1 to fully shield real estate licensees from civil liability pursuant to the act for communicating false, misleading, or deceptive information regarding real estate located in the State if the licensee had no actual knowledge that the information was false, misleading, or deceptive and made a reasonable and diligent inquiry to ascertain whether the information provided to the licensee was of a false, misleading, or deceptive character. Prior to amendment, the law protected real estate licensees only against recovery for punitive damages and attorney's fees pursuant to N.J.S.A. 56:8-19.

 P.L. 2021, c. 442 also provides that if a property condition disclosure statement indicates a seller's awareness of water leakage, accumulation, or dampness, the presence of mold or other similar natural substance, or repairs or other attempts to control any water or dampness problem, the real estate licensee will be shielded from liability if the licensee: 1) refers the buyer to the Mold Guidelines for New Jersey Residents pamphlet on the Department of Health website, or a similar document approved by the Director of the Division (Mold Guidelines); and 2) if requested by the buyer, provides the buyer with a physical copy of the pamphlet. The Division proposes to amend N.J.A.C. 13:45A-29.1 by adding new paragraph (c)3 to reflect this statutory requirement. Finally, the Division proposes multiple technical, non-substantive amendments relating to recodification and punctuation.

 The Division has determined that the comment period for this notice of proposal shall be 60 days; therefore, pursuant to N.J.A.C. 1:30-3.3(a)5, this notice is excepted from the rulemaking calendar requirement.

 Social Impact

 The proposed amendments are anticipated to have a positive social impact on consumers, as the rules ensure that consumers will be more fully informed regarding the presence of potentially harmful or costly property conditions, such as lead plumbing and water damage. In addition, the requirement that licensees refer buyers to the Mold Guidelines for New Jersey Residents on the Department of Health website if the seller discloses that the property has dampness or mold will allow consumers to better understand the health consequences of mold and what remediation is necessary if mold is present. The proposed amendments may also have a positive social impact on real estate licensees who will be protected from civil liability if they comply with the requirements of the section.

 Economic Impact

 The proposed amendments may have an economic impact on consumers who, due to enhanced disclosure requirements, may be better prepared to handle the costs associated with inspections and remediation of issues related to lead plumbing or water damage. The proposed amendments should have a positive economic impact on real estate licensees whose compliance with the section will shield them from civil liability for monetary damages.

 Federal Standards Statement

 A Federal standards analysis is not required because the proposed amendments are subject to State statutory requirements and are not subject to any Federal requirements.

 Jobs Impact

 The Division does not believe that the proposed amendments will result in the creation or loss of jobs in the State.

 Agriculture Industry Impact

 The Division does not anticipate that the proposed amendments will have any impact on the agriculture industry in the State.

 Regulatory Flexibility Analysis

 Any real estate licensee that is a "business which is resident in this State, independently owned and operated and not dominant in its field, and which employs fewer than 100 full-time employees" would constitute a "small business" within the meaning of the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq. (RFA). N.J.S.A. 52:14B-17. In addition, a real estate licensee may be employed by a "small business" within the meaning of the RFA. To the extent a real estate licensee qualifies as a "small business" or is employed by a "small business" pursuant to the RFA, the following analysis applies pursuant to N.J.S.A. 52:14B-19. The proposed amendments do not impose recordkeeping or recording requirements. However, they do impose compliance requirements. In particular, the proposed amendments require real estate licensees to refer buyers to the Mold Guidelines or, upon request, to provide a physical copy of the Mold Guidelines. They will also require real estate licensees to use updated property condition disclosure statements. Real estate licensees may incur some fees and incidental costs associated with providing physical copies of the Mold Guidelines and updating their documents. These costs will vary according to the size of the business. The Division believes that no professional services are likely to be needed to comply with the proposed amendments.

 The Division believes that the proposed amendments are necessary to promote and protect the public welfare. Thus, the Division believes that the proposed amendments must be uniformly applied to all deed procurement services and should not provide any exemptions based upon the size of the business.

 [page=591]

Housing Affordability Impact Analysis

 The proposed amendments are unlikely to have any impact on the affordability of housing in New Jersey and there is an extreme unlikelihood that the amendments would evoke a change in the average costs associated with housing because the proposed amendments concern property condition disclosures and do not impose any remediation requirements.

 Smart Growth Development Impact Analysis

 The proposed amendments will have an insignificant impact on smart growth and there is an extreme unlikelihood that the amendments would evoke a change in housing production in Planning Areas 1 or 2, or within designated centers, under the State Development and Redevelopment Plan in New Jersey because the proposed amendments concern property condition disclosures.

 Racial and Ethnic Community Criminal Justice and Public Safety Impact

 The proposed amendments will have an insignificant impact on pretrial detention, sentencing, probation, or parole policies concerning juveniles and adults in New Jersey because the proposed amendments concern property condition disclosures. Accordingly, no further analysis is required.

 Full text of the proposal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]):

 SUBCHAPTER 29. PROPERTY CONDITION DISCLOSURE

 13:45A-29.1 Property Condition Disclosure Form

 (a) (No change.)

 (b) The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise:

 "Real estate licensee" means a real estate broker, broker-salesperson or salesperson licensed [under] pursuant to N.J.S.A. 45:15-1 et seq.

 "Property condition disclosure statement" means a writing, as set forth [in] at (d) below, signed by the seller and containing information on the condition of the property being sold.

 (c) A real estate licensee shall not be [subject to punitive damages, attorneys fees, or both under N.J.S.A. 56:8-19] liable for the communication of any false, misleading, or deceptive information to a buyer [which] that had been provided to the real estate licensee [by or on behalf of the seller of] regarding real estate located in the State of New Jersey if the real estate licensee:

 1. Had no actual knowledge of the false, misleading, or deceptive character of the information; [and]

 2. Made a reasonable and diligent inquiry to ascertain whether the information is of a false, misleading, or deceptive character. A real estate licensee will [have been] be deemed to have made a "reasonable and diligent inquiry" in circumstances including, but not limited to, those in which the false information communicated to the buyer can be shown to have been:

 i. Provided in a report or upon a representation by a person, licensed or certified by the State of New Jersey, including, but not limited to, an appraiser, engineer, architect, home inspector, plumber, or electrical contractor, of a particular physical condition pertaining to the real estate derived from inspection of the real estate by that person;

 ii. (No change.)

 iii. Obtained from the seller in a property condition disclosure statement as set forth [in] at (d) below, so long as the buyer is informed by the real estate licensee that the seller is the source of the information, and that prior to advising the buyer that the seller is the source of information, the real estate licensee visually inspected the property with reasonable diligence to ascertain the accuracy of the information disclosed by the seller[.]; and

 3.Referred the buyer of the property to the Mold Guidelines for New Jersey Residents pamphlet on the Department of Health website, or its successor, and, if requested by the buyer, provided the buyer with a physical copy of the pamphlet, in the event the property condition disclosure statement contained information in response to questions 9, 9a, or 10 set forth at (d) belowthat indicated the seller's awareness of water leakage, accumulation, or dampness, the presence of mold or other similar natural substance, or repairs or other attempts to control any water or dampness problem on the property.

 (d) The property condition disclosure statement shall be in the following form and contain, at a minimum, the following information. Additional information may be requested if, in the opinion of the real estate licensee, and under the facts and circumstances of a particular real estate transaction, it would be appropriate to do so.

SELLER'S PROPERTY CONDITION DISCLOSURE STATEMENT

 Property Address: ___________

 __________

 Seller: __________

 The purpose of this Disclosure Statement is to disclose, to the best of Seller's knowledge, the condition of the Property, as of the date set forth below. The Seller is aware that he or she is under an obligation to disclose any known material defects in the Property even if not addressed in this printed form. Seller alone is the source of all information contained in this form. All prospective buyers of the Property are cautioned to carefully inspect the Property and to carefully inspect the surrounding area for any off-site conditions that may adversely affect the Property. Moreover, this Disclosure Statement is not intended to be a substitute for prospective buyer's hiring of qualified experts to inspect the Property.

 If your property consists of multiple units, systems and/or features, please provide complete answers on all such units, systems and/or features even if the question is phrased in the singular, such as if a duplex has multiple furnaces, water heaters and fireplaces.

 OCCUPANCY

 ROOF

 ATTIC, BASEMENTS AND CRAWL SPACES (Complete only if applicable)

 TERMITES/WOOD DESTROYING INSECTS, DRY ROT, PESTS

 STRUCTURAL ITEMS

 ADDITIONS/REMODELS

 PLUMBING, WATER AND SEWAGE

 HEATING AND AIR CONDITIONING

 WOODBURNING STOVE OR FIREPLACE

 ELECTRICAL SYSTEM

 LAND (SOILS, DRAINAGE AND BOUNDARIES)

 ENVIRONMENTAL HAZARDS

 DEED RESTRICTIONS, SPECIAL DESIGNATIONS, HOMEOWNERS ASSOCIATION/CONDOMINIUMS AND CO-OPS

 MISCELLANEOUS

 RADON GAS

 Instructions to Owners

 By law (N.J.S.A. 26:2D-73), a property owner who has had his or her property tested or treated for radon gas may require that information about such testing and treatment be kept confidential until the time that the owner and a buyer enter into a contract of sale, at which time a copy of the test results and evidence of any subsequent mitigation or treatment [page=596] shall be provided to the buyer. The law also provides that owners may waive, in writing, this right of confidentiality. As the owner(s) of this property, do you wish to waive this right?

 If you responded "yes," answer the following questions. If you responded "no," proceed to the next section.

 MAJOR APPLANCES AND OTHER ITEMS

 The terms of any final contract executed by the seller shall be controlling as to what appliances or other items, if any, shall be included in the sale of the property.

 Which of the following items are present in the property? (For items that are not present, indicate "not applicable.")

 ACKNOWLEDGMENT OF SELLER

 The undersigned Seller affirms that the information set forth in this Disclosure Statement is accurate and complete to the best of Seller's knowledge, but is not a warranty as to the condition of the Property. Seller hereby authorizes the real estate brokerage firm representing or assisting the seller to provide this Disclosure Statement to all prospective buyers of the Property, and to other real estate agents. Seller alone is the source of all information contained in this statement. *If the Seller relied upon any credible representations of another, the Seller should state the name(s) of the person(s) who made the representation(s) and describe the information that was relied upon.

 ______________________________________________________

 ______________________________________________________

 ______________________________________________________

 SELLER: ______________________________________________

 DATE: _____

 SELLER: ______________________________________________

 DATE: _____

 EXECUTOR, ADMINISTRATOR, TRUSTEE

 (If applicable)

 The undersigned has never occupied the property and lacks the personal knowledge necessary to complete this Disclosure Statement.

 ______________________________________________________

 ______________________________________________________

 DATE: _____

 RECEIPT AND ACKNOWLEDGMENT BY PROSPECTIVE BUYER

 The undersigned Prospective Buyer acknowledges receipt of this Disclosure Statement prior to signing a Contract of Sale pertaining to this Property. Prospective Buyer acknowledges that this Disclosure Statement is not a warranty by Seller and that it is Prospective Buyer's responsibility to satisfy himself or herself as to the condition of the Property. Prospective Buyer acknowledges that the Property may be inspected by qualified professionals, at Prospective Buyer's expense, to determine the actual condition of the Property. Prospective Buyer further acknowledges that this form is intended to provide information relating to the condition of the land, structures, major systems and amenities, if any, included in the sale. This form does not address local conditions which may affect a purchaser's use and enjoyment of the property such as noise, odors, traffic volume, etc. Prospective Buyer acknowledges that they may independently investigate such local conditions before entering into a [page=597] binding contract to purchase the property. Prospective Buyer acknowledges that he or she understands that the visual inspection performed by the Seller's real estate broker/broker-salesperson/salesperson does not constitute a professional home inspection as performed by a licensed home inspector.

 PROSPECTIVE BUYER: ________________________________

 DATE: _____

 PROSPECTIVE BUYER: ________________________________

 DATE: _____

 ACKNOWLEDGMENT OF REAL ESTATE BROKER/BROKER-SALESPERSON/SALESPERSON

 The undersigned Seller's real estate broker/broker-salesperson/salesperson acknowledges receipt of the Property Disclosure Statement form and that the information contained in the form was provided by the Seller.

 The Seller's real estate broker/broker-salesperson/salesperson also confirms that he or she visually inspected the property with reasonable diligence to ascertain the accuracy of the information disclosed by the seller, prior to providing a copy of the property disclosure statement to the buyer.

 The Prospective Buyer's real estate broker/broker-salesperson/salesperson also acknowledges receipt of the Property Disclosure Statement form for the purpose of providing it to the Prospective Buyer.

 SELLER'S REAL ESTATE BROKER/BROKER-SALESPERSON/SALESPERSON:

 _________________________________________________________

 DATE: ________________________________________________

 PROSPECTIVE BUYER'S REAL ESTATE BROKER/BROKER-SALESPERSON/SALESPERSON:

 _________________________________________________________

 DATE: _________________________________________________