3.2 New Jersey Seller Disclosure Requirements

How New Jersey Handles Disclosure

New Jersey has no single mandatory state disclosure form like some states; instead, disclosure duties come from common law and court decisions. The practical effect is the same: a seller who knows of a material defect must reveal it, and a licensee who knows or reasonably should know of a defect must disclose it to the buyer.

The landmark case is Strawn v. Canuso (1995). The New Jersey Supreme Court held that builders, brokers, and sellers of new homes must disclose known off-site conditions (the case involved a nearby hazardous-waste landfill) that materially affect the value or desirability of the property. This extended disclosure beyond the four walls of the house.

What must be disclosed

Key point: The duty covers known defects. A seller is not required to inspect or test, but cannot lie or actively hide a problem.

Underground Storage Tanks

A frequently tested New Jersey item is the buried home heating oil tank (UST). A known tank, removal, or contamination is a material fact and must be disclosed; an undisclosed leaking tank is a classic fraud-claim scenario on the exam.

Federal Lead-Based Paint Rule

For any dwelling built before 1978, federal law (the Residential Lead-Based Paint Hazard Reduction Act) requires the seller to:

Megan's Law Notice

New Jersey contracts include a Megan's Law statement informing buyers that information on registered sex offenders is available from local law enforcement. The agent's duty is satisfied by delivering this notice; agents do not research or warrant individual offender locations.

What Is NOT Required: Stigmatized Property

New Jersey does not require disclosure of psychological or stigma facts:

However, a licensee who is asked a direct question must answer truthfully and may never misrepresent.

As-Is Sales and Buyer Remedies

An as-is clause means the buyer accepts the property's current physical condition and the seller will not make repairs. It does not cancel the duty to disclose known defects, and it never permits active concealment.

Trap: "As is" plus active concealment (painting over a known foundation crack) still exposes the seller to a fraud claim. As-is shifts repair responsibility, not honesty.

The Agent's Independent Duty

New Jersey draws a sharp line between the seller's duty and the licensee's duty. Even if a seller stays silent, a broker or salesperson who knows or reasonably should know of a material physical defect must disclose it to the buyer. This duty flows from the licensee's status as a professional and from the Real Estate Commission's prohibition on misrepresentation. An agent cannot escape liability by claiming the seller told them to stay quiet; following such an instruction would itself be an actionable violation that can lead to discipline by the New Jersey Real Estate Commission.

Material vs. Immaterial Facts

A material fact is one that a reasonable buyer would consider important in deciding whether or how much to pay. Foundation movement, a leaking oil tank, chronic basement flooding, and an unpermitted addition are material. By contrast, cosmetic wear, normal aging, and purely aesthetic preferences are generally immaterial. The exam often asks you to sort facts into these buckets, then decide whether disclosure is required. Apply a simple test: would this change a reasonable buyer's decision or price? If yes, treat it as disclosable when known.

Environmental and New-Construction Notes

For newly built homes, builders must register and may owe statutory new-home warranty coverage, and Strawn's off-site disclosure logic applies most forcefully to developers marketing new subdivisions. For older homes, the buried-oil-tank issue and known radon results are the classic disclosable items. When a property sits in a flood-prone area, lenders will require flood insurance, and a known flooding history is a material fact the seller should reveal. Treat every known environmental condition as presumptively material until you can justify otherwise.