What Permits and Approvals Are Not Covered by the Permit Extension Act?

When the recession hit New Jersey and the rest of the country in 2008, concerns that critical development projects would be abandoned before the economy could rebound led then Governor John Corzine to sign into law the New Jersey Permit Extension Act (PEA), keeping qualified governmental permits and approvals open until July 1, 2010. Two subsequent amendments to the statute have tolled the expiration date of these permits to December 31, 2014.

When the legislature first considered extending the termination dates for permits and approvals, it met with significant resistance from community activists and environmentalists. In order to garner the necessary support to pass the bill, sponsors had to agree that certain types of permits or approvals were not subject to extension. These include:

    • Permits or approvals in what are considered to be “environmentally sensitive areas.” Those locations qualifying as “environmentally sensitive areas” are specifically delineated in the 2012 amendment of the PEA. They include, but are not limited to, state planning areas, critical environmental and historic sites, and specific locations within the Highlands Region.
    • Permits or approvals within the State Pinelands Boundary, which are subject to the Pinelands Protection Act, if the extension would necessitate approval from the U.S. Department of Interior, or would violate state or federal laws or regulations.
    • Permits or approvals subject to the New Jersey Flood Hazard Area Control Act, except projects that were already underway when the PEA went into effect
    • Department of Transportation permits issued by the state of New Jersey, except right-of-way permits
    • All permits or approvals issued by the federal government, or any permit or approval with a duration or expiration date set by federal law

Contact Our Office

At the law office of Del Duca Lewis, we bring five decades of commercial real estate and business law experience to clients across southern New Jersey and the greater Philadelphia area. Attorney Damien Del Duca has been named a New Jersey Super Lawyer. To schedule a meeting to discuss your legal concerns, contact our office online or call us at 856-427-4200.

The New Jersey Permit Extension Act

An Overview of the Purpose and Provisions of the Act

In September, 2008, concerned about the growing economic and financial challenges facing business and commerce in New Jersey, then Governor John Corzine signed into law NJSA 40:55D-135.1 et seq., known as The Permit Extension Act of 2008 (The PEA). The principal function of the PEA was to extend the terms of qualified governmental permits and approvals to July 1, 2010. According to sponsors of the bill, the fundamental objective of the statute was to minimize the risk that development projects would be abandoned before the economy had a chance to recover from the 2008 recession. Since the original bill was signed, it has been amended twice, with the expiration period now running through December 31, 2014, with a grace period through June 30, 2015.

To obtain the necessary support for the law, developers had to strike a compromise with opponents, including community activists and environmentalists. As a result, certain types of permits may not be extended under the statute:

  • Approvals in “environmentally sensitive areas”
  • Permits governed by the Flood Hazard Area Control Act, unless work had already begun
  • Permits or approvals subject to the Pinelands Protection Act, if the extension would require approval from the U.S. Secretary of the Interior, or would violate federal or state statute or regulation
  • State DOT permits, except for right-of-way permits
  • Any permit or approval from the federal government, or any permit or approval that has an expiration date or duration established by federal law

The PEA is also inapplicable to approvals or permits in coastal centers, as set forth in the Coastal Area Facility Review Act, unless the developer filed an application for plan endorsement to the New Jersey State Planning Commission by March 15, 2007, and was in compliance with coastal zoning management rules.

Contact Del Duca Lewis

At the law office of Del Duca Lewis, we offer five decades of commercial real estate and business law experience to clients across southern New Jersey and the greater Philadelphia area. As a testament to our knowledge, skill, experience and effectiveness, attorney Damien Del Duca has been named a New Jersey Super Lawyer. To schedule an appointment to discuss your real estate or business law needs, contact our office online or call us at 856-427-4200.

Issues to Consider When Buying or Selling Commercial Property in New Jersey

Buying or selling commercial real estate is not the same as buying or selling a home. In most instances, the value of the property will be substantially higher than most residential transactions. Commercial real estate transactions can involve complex financing arrangements, and there may be environmental or other issues that have a significant impact on whether the deal will go through. In addition, unlike residential real estate sales, where consumer protection laws protect buyers by requiring certain disclosures, commercial real estate transactions are traditionally caveat emptor, or “buyer beware.”

Determining the Value of Commercial Property

There are a number of factors that affect the value of commercial property. The location will always have an impact on value. Other variables include the income potential of the real estate, including any established current or future income stream, as well as the overall health of the real estate market. To protect your interests, you want to retain a professional real estate valuation expert.

Title and Survey

As the new owner, you want to ensure that you are receiving title to the property free and clear of any exceptions that may adversely affect your use of the property. Such exceptions include restrictions and agreements that limit your use of the property as well as easements that give others the right to use the property. It is important to have experienced legal counsel review title to the property and the survey in order to properly advise you with respect to any exceptions that may affect the title to the property.

Land Use Approvals

It is essential to have a clear understanding of whether or not your intended use of the property will require the approval of any municipal or county planning boards or any state agencies. If any approvals are required it is essential that your purchase agreement have a well drafted approvals contingency that will provide you the time to obtain the required approvals and the ability to terminate the agreement if you are unable to do so.

The Impact of a Commercial Real Estate Purchase on Your Cash Flow or Liquidity

Make certain you have a clear sense of how the commercial real estate transaction will affect your liquidity or cash flow. If you have to put significant funds down, you may not have the liquidity you need to respond to market fluctuations. If some or all of the revenue from the property is in the form of rents paid to you, you may experience cash flow challenges if tenants fall behind. You may also incur legal expenses to protect your rights with tenants. If cash flow becomes critical, you may be unable to make payments and face foreclosure proceedings.

Who Assumes Liability for Any Violation of Law or Regulation?

Before you enter into a purchase agreement, you need to identify any potential legal issues, including zoning violations or environmental problems. If you need to rezone the property to use it, will you run into significant resistance, or will there be substantial costs to do so? What is the nature of any environmental violation? Does it require a cleanup? How long will that take? Will it have a significant impact on the profitability of your venture?

Contact Our Office

At Del Duca Lewis, our lawyers have more than five decades of commercial real estate and business law experience, representing clients throughout southern New Jersey and the greater Philadelphia area. In recognition of the high standards by which we operate our practice, attorney Damien Del Duca has been named a New Jersey Super Lawyer.

To schedule an appointment to discuss your real estate or business law needs, contact us online, or call our office at 856-427-4200.