NJDEP Issues Guidance for Purchasers of Contaminated Sites
Remediation of an underground storage tank (UST) leak or other environmental contamination can take time. Property owners may have already planned to sell by the time they discover the spill, or they may institute a sale in the meantime even though the site remains under administrative oversight by regulators. Prospective buyers do not want to be stuck on the hook for mistakes made by prior owners. The New Jersey Department of Environmental Protection (NJDEP) recently issued guidance pertinent to this narrow, but especially thorny, legal issue.
Read on for a discussion of NJDEP’s guidance concerning the purchase of contaminated sites. If you need assistance with a damaged or contaminated UST in New Jersey or Florida, call an expert underground storage tank (UST) remediation and removal professional at Herbert Lutz & Co.
Buyers of Contaminated Properties Can Alleviate Burdensome Administrative Oversight
NDJEP recently posted Pre-Purchase Administrative Consent Order Guidance as part of the Contaminated Site Remediation and Redevelopment Program (CSRRP). The guidance document explains how the purchaser of a contaminated site subject to Direct Oversight can obtain a pre-purchase Administrative Consent Order (ACO), adjusting the parameters of the oversight to ease the burden on the new owners.
Pursuant to the Site Remediation Reform Act (SRRA), contaminated sites are subjected to a timeframe for the completion of a remedial investigation. The timeframe may be the general statutory timeframe or a site-specific timeframe mandated by NJDEP. If a site fails to adhere to the timeframe, the site could become subject to Direct Oversight by the Department. Direct Oversight involves a “more prescriptive remediation process for the person responsible for conducting remediation.” The process includes, for example: “[T]he posting of a Remediation Funding Source (“RFS”), Department approval of all submissions, and Department direction of how the remediation proceeds.”
If a party purchases a site subject to Direct Oversight, the buyer becomes responsible for remediating the site per the Spill Compensation and Control Act (Spill Act). Because oversight travels with the site, rather than with the person, the new owner would be subject to the additional Direct Oversight requirements. A pre-purchase ACO can alleviate this burden.
An ACO can remove restrictions on the RFS, alleviate the need for prior NJDEP approval prior to remediation, eliminate NJDEP’s oversight fees, and avoid the need for a Feasibility Study, among other things. The guidance makes clear that the new owner must still retain a Licensed Site Remediation Professional (LSRP) to oversee the remediation process.
According to the guidance, so long as the potential buyer is “neither a discharger, a responsible party, nor . . . related to the responsible party(ies),” they can seek a pre-purchase ACO. The ACO must be fully executed and signed by the prospective buyer and NJDEP before closing on the property sale. Prospective buyers can request a pre-purchase ACO by sending a letter to the Bureau of Enforcement & Investigations (BEI) identifying the property, requesting the ACO, affirming eligibility, and including other relevant information and documents pertinent to the property and the sale.
Call the Experienced, Professional UST Remediation Experts at Lutz for Your Underground Storage Tank Issues
If you discover a UST at your construction worksite, if you have to respond to a UST spill on your property, or if you inherit contaminated property in your asset purchase, you need thorough help from trusted advisors with years of underground storage tank experience. For experienced, effective assistance dealing with a UST on your property, call Herbert Lutz & Company in Florida at 954-971-5222, or in New Jersey at 908-862-8888.