New Jersey will require sellers to disclose a dam — including its hazard classification
New Jersey will require sellers to disclose a dam — including its hazard classification
2026-09-15 · New Jersey · Legislation
A great many New Jersey homeowners associations own a dam, and a new law will require sellers to say so.
A4007, first reprint, was signed August 6, 2026 as P.L.2026, c.69. It supplements the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq., and is keyed to the property condition disclosure statement under N.J.S.A. 56:8-19.1.1
What gets disclosed
A new heading, "Disclosure of Dam Ownership," with yes, no or unknown answers and a mandatory explanation on "yes," covering:
- whether a dam is located wholly or partially on the property, and its hazard classification;
- the results of the most recent required inspection;
- any obligations attached to it.
When it applies — and this is the catch
The act is effective immediately, but it applies only to sales or exchanges occurring on or after the 90th day following publication of the revised property condition disclosure statement by the Division of Consumer Affairs.
That publication has not happened. There is therefore no effective date to give, and anyone stating one is guessing. The trigger is a form, and the form does not exist yet.
Why this reaches community associations
New Jersey has a large number of lake communities — in Sussex, Morris, Passaic, Warren and Ocean counties especially — where the lake is impounded by a dam and the dam is owned by the homeowners association.
The association owns it because the developer conveyed the common property to the association at transition, and the dam came with the lake. Many boards discover the full implications of that ownership only when a regulator, an engineer or an insurer raises it.
The hazard classification is the number that matters
New Jersey classifies dams by the consequences of failure, not by the likelihood of it. A high-hazard classification means failure would probably cause loss of life; significant hazard means substantial property damage. The classification drives the inspection interval, the engineering requirements and the emergency action planning.
Once that classification is on a disclosure form, three things follow for an association, and none of them is about the seller.
One: buyers will start asking the board
A seller filling out the form has to answer for the hazard classification, the most recent inspection result and the obligations attached. An individual unit owner does not have that information. The association does, and the request will arrive at the manager's desk as part of the resale package.
Boards that own a dam should establish now, in writing, what the classification is, when the last inspection was, what it found, and what remains outstanding — because that becomes a standard resale disclosure item the moment the form publishes.
Two: it interacts with the reserve statute
A dam is a capital asset the association is obligated to maintain. New Jersey's reserve law requires a study covering "the capital assets of a common interest community that the association is obligated to maintain," funded over a 30-year plan whose balance never falls below zero.
A dam rehabilitation is a seven-figure item in many cases. An association whose reserve study does not include the dam has a study that does not comply, and a funding plan built on an incomplete asset list.
Three: the Consumer Fraud Act is the enforcement mechanism
This is not a housing statute with an administrative remedy. It supplements the Consumer Fraud Act, which carries treble damages and fee-shifting. A disclosure that is wrong because the association gave the seller wrong information is a problem with a large downside and an obvious defendant.
What to do before the form publishes
Find the dam's file. Confirm the classification and the current inspection status with the Department of Environmental Protection's dam safety programme. Check whether the dam appears in the reserve study. And decide who at the association answers a seller's question about it, so that the answer is consistent and documented.
None of that depends on the form being published. All of it becomes urgent the day it is.
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