I looked up the OPs question a bit more - and here's something interesting. NJ law doesn't go as far as to state the unit was flooded, just that the unit is in the flood zone:

Flood zone. Prior to move-in, landlord must inform tenant if rental is in a flood zone or area. (N.J. Stat. Ann. ? 46:8-50)

NOLO Source with Links

The realtor may (or may not) be disclosing what the owner told him or her. If the owner lies to the realtor, there is no way that the realtor would be doing anything illegal.

Tenants need to do their due diligence. If they wish to rent an apartment and have specific needs (like no smoking, no pests, etc), they need to make sure a rider is placed in the lease that gives them a reasonable out-clause if that problem develops during their tenancy. If the landlord doesn't want to do this, then don't rent from that individual.

If you were renting in an area where you could reasonably expect flooding, it's on you as a tenant, to do your homework and make sure you are protected in case flooding occurs. If I'm renting near the river, and I watched the news for two minutes in October, I'd be reasonably aware that I could be moving into a flood zone.

Renters have rights and their guarantee of habitability is clearly outlined in the N.J. tenant right guidelines. These are upheld in court fairly and fully.

Here's a great guide that outlines NJ rental law:

http://www.lsnjlaw.org/Publications/P ... Manuals/TenantsRights.pdf

That all said, you have raised an excellent point. Should owners be legally bound to disclose if a unit flooded? And more importantly, was the unit professionally remediated to prevent problems like mold from occurring? Was the electrical and plumbing corrected with a permit and inspected by the city?

Landlords must disclose lead issues in buildings (although many don't use the proper forms to do so) - so why wouldn't they also disclose buildings that have had fires or floods?

This may be an emerging issue in the city and one the new city council could tackle for the safety of its residents.

Is it legal for realtors to insist that an apartment did not receive any flood water during Hurricane Sandy when the unit actually got about four feet of water?

Beware any ground floor real estate in Paulus Hook that's being advertised as newly renovated!