Blogs > NJ Real Estate Dispute

Potentially Heavy Legislation Out of Trenton

The post below was co-authored by Jeffrey M. Casaletto.

While we watch the new U.S. administration target, for better or for worse, EPA’s budget and jurisdictional reach, there are signs of the other extremes within New Jersey government.  A recently introduced bill, No. A4305, has the potential to pull residential properties into the quagmire of New Jersey’s site remediation program.  Homeowners and other residential property owners beware!

A4305c as currently written seems to implicate almost any residential real property – both vacant lots intended for residential use and lots with homes already on them. The bill purports to cover “individual lots of real property intended for residential purposes.” While this language arguably limits the bill’s coverage to vacant lots intended for residential use, it is not model of clarity and the explanatory Statement accompanying the bill muddies the waters even more where it states that the intent is to address  “ individual lots of residential property.” An “individual lot of residential property” could be deemed to cover not only vacant lots, but lots with homes already on them.  As written, this has broad meaning and could encompass more properties than originally intended.

This said, the bill requires that the soil of residential properties with more than 2,500 square feet (about 1/16 of an acre) of pervious surface be sampled for lead before the property is sold – paving contractors are likely to love this bill. For you lawyers out there, the bill requires all contracts of sale for such property to include a provision, as a condition of sale, requiring this sampling (as if the haggling that goes on during the inspection process weren’t anxiety-producing enough for sellers and buyers).  All results must be provided to the buyer and the New Jersey Department of Environmental Protection.  If any data reflects lead in concentrations above New Jersey cleanup standards (currently 400 parts per million for residential properties), then the result is a cleanup obligation (likely seller’s) requiring the residential property owner to retain a Licensed Site Remediation Professional to complete a cleanup. We can’t think of a better way to dampen enthusiasm for the sale of residential properties in New Jersey, than to insert into sales contracts the acronym “LSRP” coupled with the word “cleanup.”

In addition, the bill does not provide for any meaningful exceptions to, or relief from, cleanup obligations of any kind.  This means, single-family homes are implicated as much as residential apartment buildings or condominiums.  It also means newly-built (or newer) residential properties – where lead-based paint or other lead sources might not be a reasonable concern – are implicated as much as older residential properties.

This could leave many homeowners, especially owners of older homes (which tend to be the more affordable homes), with a bill they cannot afford to pay, especially if there is a cleanup to be completed.  Homeowner’s insurance might not cover these cleanup costs.  Certainly, the cash-strapped DEP, with little grant money allocated to assist private property owners, is not in a position to help either.

Contrasted with a site remediation program that has, historically, stayed away from intruding on residential properties, this bill suggests an expansion of DEP’s jurisdiction with costly effects to those that might be least able to afford them.  Despite what might have been a well-intended effort to address the potential for lead contamination at residential properties – contamination that probably results from no act or omission of the property owner – the unintended burden on a residential property owner might be more devastating than any potential harm this bill seeks to address.

Whether the bill is referred to a committee for review or reported directly to the floor of the House, our legislators will hopefully recognize its deficiencies and seek to clarify its scope and applicability.