Transferring Industrial Property
Transferring industrial property in New Jersey - whether the property is being used now for an industrial purpose, or for an industrial use at some point in the past - is a complex proposition. There is a complex, strict regulatory framework which governs the sale, lease or closure of industrial property. It must be complied with. McLaughlin & Nardi's real estate attorneys have significant experience and have had considerable success representing both buyers and sellers in the complex transaction involved in transferring industrial property.
New Jersey's Industrial Site Recovery Act, commonly known as "ISRA," controls the transfer (including sales and leases) or closure of industrial property which may have been exposed to "hazardous waste" - including merely storage. ISRA has been controlling the transfer and closure of industrial sites since 1983, though it has been amended many times. When ISRA was passed, the Legislature wanted to reduce the cost of abandoned contaminated sites. Its main method is requiring that an industrial site must be inspected and a cleanup plan put in place before transfer or abandonment. Business owners and operators share this responsibility.
Before transfer, the property is evaluated to see if it is an "industrial establishment." This depends on its past industrial use, when it operated, and whether hazardous waste was present. If so, ISRA applies and controls the transfer. Owners used to be able to obtain a "non-applicability" letter from the New Jersey Department of Environmental Protection ("NJDEP"), but now they must make the determination on their own with their own environmental engineers.
If ISRA applies, the owner or operator must comply with NJDEP regulations prior to transfer or closure. The owner or operator will often need to have environmental engineers conduct a preliminary assessment of the property to identify any "areas of concern," and conduct a site investigation to see if the remediation of hazardous materials is required. If contamination is found, the site must be remediated in accordance with the NJDEP's regulations before transfer or closure. The requirements of the NJDEP's regulations are extremely technical. Lawyers are normally needed to ensure legal compliance, and environmental engineers are normally required for the technical environmental details.
Compliance with ISRA is mandatory. The New Jersey Department of Environmental Protection (the "DEP") is charged with investigating and enforcing violations. The DEP can impose fines up to $25,000 per day. Company personnel and owners can often be held personally responsible.
Under ISRA, the responsibility for compliance is on the seller. However, buyers and sellers can voluntarily enter into written agreements to transfer ISRA compliance to the buyer. This makes the contract for sale of the industrial property essential. Getting it right is extremely important. Buyers and sellers must make sure they have protected themselves. They must be aware of their own and each respective party's responsibilities.
Commercial real estate is a valuable asset. It is important to ensure that you are well-represented in its transfer. McLaughlin & Nardi's commercial real estate attorneys have significant experience in the purchase, sale, and leasing of New Jersey industrial property. To contact one of our New Jersey commercial real estate attorneys, please e-mail us or call (973) 890-0004.