S1899

An Act concerning property condition disclosure statements and amending P.L.1999, c.76.

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

1. Section 1 of P.L.1999, c.76 (C.56:8-19.1) is amended to read as follows:

1. a. Notwithstanding any provision of P.L.1960, c.39 (C.56:8-1 et seq.) to the contrary, there shall be no right of recovery of punitive damages, attorney fees, or both, under section 7 of P.L.1971, c.247 (C.56:8-19), against a real estate broker, broker-salesperson or salesperson licensed under R.S.45:15-1 et seq. for the communication of any false, misleading or deceptive information provided to the real estate broker, broker-salesperson or salesperson, by or on behalf of the seller of real estate located in New Jersey, if the real estate broker, broker-salesperson or salesperson demonstrates that he:

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

[b.] (2) Made a reasonable and diligent inquiry to ascertain whether the information is of a false, misleading or deceptive character. For purposes of this section, communications by a real estate broker, broker-salesperson or salesperson which shall be deemed to satisfy the requirements of a "reasonable and diligent inquiry" include, but shall not be limited to, communications which disclose information:

[(1)] (a) 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, home inspector, plumber or electrical contractor, or an unlicensed home inspector until December 30, 2005, of a particular physical condition pertaining to the real estate derived from inspection of the real estate by that person;

[(2)] (b) provided in a report or upon a representation by any governmental official or employee, if the particular information of a physical condition is likely to be within the knowledge of that governmental official or employee; or

[(3)] (c) that the real estate broker, broker-salesperson or salesperson obtained from the seller in a property condition disclosure statement, which form shall comply with regulations promulgated by the director in consultation with the New Jersey Real Estate Commission, provided that the real estate broker, broker-salesperson or salesperson informed the buyer that the seller is the source of the information and that, prior to making that communication to the buyer, the real estate broker, broker-salesperson or salesperson visually inspected the property with reasonable diligence to ascertain the accuracy of the information disclosed by the seller.

b. The form of property condition disclosure statement promulgated by regulation pursuant to subparagraph (c) of paragraph (2) of subsection a. of this section shall contain disclosures concerning any history of smoking of tobacco on the property. The terms of the disclosures shall be promulgated by the director in consultation with the New Jersey Real Estate Commission, and shall include, but not be limited to, information concerning the location and frequency of tobacco usage on the property.

c. Nothing in this section shall be interpreted to affect the obligations of a real estate broker, broker-salesperson or salesperson pursuant to the "New Residential Construction Off-Site Conditions Disclosure Act," P.L.1995, c.253 (C.46:3C-1 et seq.), or any other law or regulation.

(cf: P.L.2004, c.18, s.2)

2. This act shall take effect on the 90th day next following enactment, provided that the director may take any anticipatory actions necessary to implement the provisions of this act.

STATEMENT

This bill requires real estate property condition disclosure statements to include the disclosure of any history of tobacco smoking on the property.

Under the consumer fraud act, there is no right of recovery against real estate licensees for the communication of false, misleading, or deceptive information to a buyer, which information has been provided to the licensee by a seller of real estate located in New Jersey, if the licensee demonstrates that he had no actual knowledge of the information and made a reasonable and diligent effort to ascertain if the information is false, misleading or deceptive. As part of the effort to satisfy the requirement to make a reasonable and diligent inquiry, the licensee may obtain from the seller a completed property condition disclosure statement, which provides the buyer with information about the property.

Under this bill, the property condition disclosure statement must contain disclosures concerning any history of smoking of tobacco on the property. The bill requires the terms of the disclosures to be promulgated by the Director of the Division of Consumer Affairs in consultation with the New Jersey Real Estate Commission, and to include, but not be limited to, information concerning the location and frequency of tobacco usage on the property.

Recent studies have shown that tobacco residues can remain behind in a property for long periods after tobacco has been smoked there. These residues, or “thirdhand smoke,” can contain hazardous toxins and carcinogens, which can be especially dangerous to children, who are at a higher risk of coming in contact with and ingesting the residue. This bill would cause disclosure of the history of smoking of tobacco on a property by many sellers of tobacco-affected properties, putting buyers on notice of this potential hazard.