State Must Share Records to Protect Buyers and Facilitate Responsible Development
The state has a responsibility to protect its workers, the environment, and local economic development, and with appropriate safety measures in place, it can accomplish all three by increasing transparency and sharing environmental records with the public.
August 20, 2020 at 12:00 PM
7 minute read
When Governor Phil Murphy declared a State of Emergency and Public Health Emergency on March 9, a number of state offices were shuttered that New Jerseyans rely on to conduct essential oversight and share information with the public. Among these was the New Jersey Department of Environmental Protection (NJDEP) and, notably, the department's Office of Record Access (ORA), which buyers in commercial real estate transactions need to access in order to make informed decisions about a property's environmental health and history.
Because New Jersey law designates current owners strictly liable for environmental issues on their property, no matter how or by whom they were created, environmental records furnished through the ORA are essential for buyers to be sure that sellers are not passing environmental liability onto them. Wary buyers are delaying or backing out of deals—or dangerously moving ahead without knowing whether they could become responsible for arranging an environmental cleanup and footing the bill. Delayed action on environmental issues, risks for buyers, and massive tax revenue deferrals and losses through broken deals are the dismal results.
For environmentally responsible buyers and sellers, access to the ORA's records is essential. Under the New Jersey Spill Compensation and Control Act, any person who owns real property acquired since 1993 with a hazardous substance that she knew or should have known about is strictly liable for all cleanup and removal costs. That means a buyer will be liable for any environmental contamination on the property caused prior to their ownership unless they have taken steps to provide defenses. Under New Jersey's "innocent purchaser defense," a buyer could prove that he had no reason to know about environmental damages because he conducted "all appropriate inquiry" prior to purchase, including obtaining environmental records from the property and arranging a site investigation. But without access to NJDEP records, buyers cannot know a property's full environmental history, and cannot say that they had no reason to know, either.
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