Protecting Your Commercial Real Estate Investment

A Due Diligence Checklist for Commercial Lending Transactions

Once you have negotiated acceptable terms for the purchase of commercial property, there are specific steps you need to take to minimize your risk and protect your investment. Here’s a checklist of the critical issues you need to address before you finalize the deal:

  • Any liens or encumbrances on the title—You should receive a title commitment, which will list any exceptions to clear title. There should be documents recorded for each exception. You want your lawyer to examine all underlying documents. Your lawyer should also address title insurance matters, including the type and extent of title insurance needed.
  • Environmental concerns—You want the property inspected for potential environmental problems by an reputable third party. The inspection should consider past, present and potential uses of the premises.
  • Potential zoning restrictions—Make certain you confirm what the current zoning is for the property, and that it allows the use you plan to make of the property. If not, you may still purchase the property, but will need to determine the likelihood that you will be able to get a variance or permit, as well as the cost of doing so. Your lawyer should also confirm whether there are currently any violations of zoning or land use ordinances.
  • Building code violations—A thorough building inspection should be completed, identifying any existing violations of the building codes, as well as issues that may affect the structural integrity of the buildings. The inspection should include any roof, all walls, HVAC, electrical, plumbing and fire/sprinkler systems.
  • Accuracy of the survey—A professional survey will help you properly evaluate many or all of the exceptions to title, such as easements or similar burdens on the property. A survey can also show encroachments or other uses that may not appear on the title commitment.
  • Current leases—If you plan to assume any leases currently on the property, you will need to verify the financial viability of tenants, as well as lease terms. You also want to ensure that all payments and expenses (including commissions due to real estate brokers) due under the leases are apportioned properly as of the time of closing.

Contact Our Office

At Del Duca Lewis, we bring more than five decades of commercial real estate and business law experience to clients throughout southern New Jersey and the greater Philadelphia area. Attorney Damien Del Duca is listed as 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.

Environmental Concerns in Commercial Development

An Overview of the State Environmental Permits Required in New Jersey

If you are a builder or developer seeking to initiate a project in New Jersey, one of your principal concerns should be environmental compliance. This blog post provides an overview of some of the more common environmental issues that may impact your potential development.

New Jersey Environmental Permits for Commercial Development

The state of New Jersey mandates that developers obtain permits if certain environmental conditions are applicable. These include:

  • The development of property in freshwater wetlands — Before any property can be developed, New Jersey law requires that the owner verify whether wetlands are present, and identify where the wetlands borders are. If there are wetlands on or within a buffer area around the project, the owner or developer will have to obtain a permit to build.
  • Projects that might increase the likelihood or intensity of flooding — The New Jersey Flood Hazard Control Act includes rigid standards for commercial developers with projects that have the potential to increase flow into rivers or streams. If an area has been designated as a flood hazard area, a commercial developer must obtain a permit.
  • Developments in coastal areas — The Wetlands Act of 1970 mandated the mapping of all coastal wetlands. A permit is required for any activity in areas delineated as coastal wetlands. The U.S. Environmental Protection Agency has delegated regulatory authority over New Jersey wetlands to the New Jersey Department of Environmental Protection.
  • Projects in zones or areas designated as tidelands — A tideland is any property currently or formerly within the mean high tide of a natural waterway, including a bay, lake, river, stream or creek. In New Jersey, tidelands are the property of the state, and their use is overseen by the Tidelands Resource Council. To use tidelands, you must get written permission for the Tidelands Resource Council, and must pay a fee.
  • Projects in the Highlands Region in New Jersey — The Highlands Region includes portions of Warrren, Morris, Hunterdon, Passaic, Bergen, Somerset and Sussex counties. If you plan a development in the Highlands Region, you may be required to obtain either an approval or an exemption from the rules governing certain types of projects.

Contact the Law Office of 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, 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.