Obligation to Disclose Off-Site Contamination Continues in New Jersey

In 1995, the New Jersey Supreme Court imposed upon residential developers and their agents the obligation to disclose to prospective purchasers of new residential construction those adverse off-site conditions that materially affect the property and which are known to the developers, but not readily observable to buyers. Soon thereafter the New Jersey legislature adopted the New Residential Construction Off-Site Conditions Disclosure Act, which severely limited the disclosure obligations of sellers concerning off-site conditions. It set up a system whereby municipal clerks had to maintain lists of all contaminated properties within the municipal borders. The act then limited the obligation of the sellers to a notice to the buyer that lists of properties off-site with contamination were available in the municipal clerk's office and affording the buyer a right to cancel the purchase contract within five days. In the case of Nobrega v. Edison Glenn Associates, 327 N.J. Super. 414, 743 A2d. 864 (2000) the Appellate Division of the Superior Court found that the new Residential Construction Off-Site Conditions Disclosure Act only abrogated common law rights of buyers. It did not affect disclosure obligations under the Consumer Fraud Act. In determining the intent of the legislation, the court relied "primarily" on a statement made by the Governor, at the time of the signing of the Bill, that it did not interfere with "any remedies that may be available in appropriate cases to prospective buyers under the Consumer Fraud Act." The result is that in New Jersey, sellers of residential property will continue to be liable to buyers for knowing failure to disclose material off-site conditions.