Proposed rule change represents a notable transformation of reporting obligations that would likely have a chilling effect on the state’s commercial real estate market.
By Melissa Clarke, Saul Ewing
In October 2024, the New Jersey Department of Environmental Protection (NJDEP) published a proposed rule (the “Proposed Rule”) that would amend its site remediation rules to codify and implement provisions of the legislation known as SRRA 2.0, which became effective on August 23, 2019. Most notably, the Proposed Rule would amend the Administrative Requirements for the Remediation of Contaminated Sites (ARRCS), N.J.A.C. 7:26C, to require prospective purchasers of real property conducting pre-closing environmental due diligence to, upon the discovery of a previously unidentified discharge of hazardous substances, immediately notify the NJDEP and the record owner.
What You Need to Know:
•NJDEP proposed a new rule that would, among other things, require a prospective purchaser of real property who obtains specific knowledge during pre-closing due diligence of a discharge of hazardous substances on the property to immediately notify NJDEP and the contract seller (record owner) of the discharge, potentially triggering further investigation and remedial obligations.
•Until now, reporting obligations have not extended to prospective purchasers performing environmental due diligence.
•The Proposed Rule, if adopted as is, could discourage real estate deals in New Jersey.
•The comment deadline for the Proposed Rule is January 31, 2025.
Related:
Proposed NJDEP Rules Could Reshape New Jersey Real Estate Transactions
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