In a major win for New Jersey's commercial real estate industry, Gov. Phil Murphy signed a bill (A573) on Jan. 5, 2023, which makes several substantive changes to the Uniform Construction Code Act in an effort to increase speed and efficiency with respect to the construction permitting inspection process. This new law that applies to both residential and commercial properties allows developers to hire private inspection agencies (authorized by the Department of Community Affairs) to perform property inspections if the local construction officials are unable to complete an inspection within three business days of the requested date, provided the property owner or developer provides a minimum of 24 hours written notice to the municipality requesting the inspection. If the municipality cannot perform the inspection by the deadline, then it must notify the property owner within 24 hours of receipt of the request. If the parties cannot agree on an alternative date, then the property owner can seek to retain a licensed private inspection company to perform the inspection and any subsequent inspections needed provided the municipality receives written notification.    

The Department of Community Affairs has been designated to oversee compliance with the new rules and has been empowered to levy penalties on towns that fail to meet the new deadlines. The department has six months to propose rules to effectuate the law's provisions and three months to implement them. The new regulations seek to hold municipalities accountable for their inability to timely perform inspections by requiring the submission of annual compliance reports to the Department of Community Affairs so that the department can oversee each municipality's ability to comply with the new time frames. If the municipality has demonstrated an inability to conduct requested inspections by the new timeframes, then property owners or contractors may request authorization from the Department of Community Affairs to use the private inspection companies for future inspections. The intended consequence of the changes to the construction code are to alleviate the difficulty many municipalities experience servicing their resident's needs, especially smaller towns with their limited resources and staff to accommodate inspection requests creating long costly delays. The bill also provides specific authorization for towns to enter into shared service agreements to consolidate work among multiple municipalities to enhance efficiency so as to better serve residents.