Real Property & Environmental Law Alert

The New Philadelphia Zoning Code - Coming Soon to a Property Near You

Alfred R. Fuscaldo — Wed, 16 May 2012 08:31:22 -0500

Ready or not, the revised Philadelphia Zoning Code becomes effective on August 22, 2012. This massive and comprehensive overhaul of the Zoning Code, its first since 1962, required over four years to complete. It was coordinated by the thirty-one member Philadelphia Zoning Code Commission, and is the culmination of countless hours of work by the ZCC, including scores of regular meetings, informational meetings, community meetings, meetings with stakeholder groups and public hearings. The changes from the current Code are many and significant, with important modifications to base and overlay zoning districts, use categories, area and bulk requirements, floor area ratio calculations, parking standards and, perhaps most meaningful, the administrative process. We will be examining these and other major revisions in this blog on a regular basis, both as the Code’s implementation date approaches as well as after it is in effect.

Alfred R. Fuscaldo is a Director in the Gibbons Real Property & Environmental Department.

Chapter 91 - Failure to Comply Still Absolute Bar to Tax Appeal in N.J.

Shepard A. Federgreen — Mon, 14 May 2012 11:44:25 -0500

In United Parcel Service v. Secaucus, UPS failed to properly respond to a request for information as to income and expenses made by the tax assessor pursuant to N.J.S.A. 54:4-34, universally known as a “Chapter 91 request.” Later, when UPS brought an action in the Tax Court to challenge its 2011 assessment, the assessor moved to have the action dismissed due to UPS’s failure to properly respond to the Chapter 91 request. This is what a tax assessor typically does in these circumstances because the statute is clear that the failure of the owner to respond to a Chapter 91 request within 45 days is an absolute bar to the right to bring an appeal of the assessment.

The Tax Court, noting the “severity of the sanction,” also noted the trend in the cases to hold the assessor to strict compliance with its obligations when making a Chapter 91 request, i.e., providing a copy of the statute and adequate notice to the property owner framed in language that is both clear and unequivocal. Here, where the tax assessor could not produce a copy of its notice, and there were various issues of proof, the Tax Court ruled that the Chapter 91 request was defective and UPS could prosecute its appeal.

So if a property owner fails to respond or properly respond to a Chapter 91 request and then brings an appeal of its assessment, the property owner might be able to defeat the assessor’s motion to dismiss for failure to comply with the Chapter 91 request by demonstrating some element of the assessor’s request did not meet the assessor’s obligations with regards thereto. That’s good to know, and might be very useful in the right circumstances. But that’s not the lesson here. The lesson is to respond to Chapter 91 requests in a timely and informative manner. Then, should the taxpayer bring an appeal, the assessor will not be in a position to even raise Chapter 91 as a basis to dismiss the property owner’s appeal.

Shepard A. Federgreen is a Director in the Gibbons Real Property & Environmental Department.

New Law Generates Buzz Among South Jersey's Wine Growers

Brett S. Theisen — Fri, 11 May 2012 15:32:59 -0500

On May 1, 2012, a law took effect that will allow New Jersey farmers and wineries to skip wholesalers and sell directly to retailers and consumers. The new law grants similar rights to out-of-state wineries and finally cleared the way for the Garden State to begin issuing new winery licenses to growers. While local business and political leaders are hoping the relaxed regulations will encourage further investment in the state’s wine industry, producers, retailers, and wine lovers alike are cheering the increased access to locally-grown wines ahead of the summer tourism season.

The new law, which we reviewed here in January, resolved the constitutional dispute at the heart of the Third Circuit’s decision in Freeman v. Corzine. That decision invalidated an earlier law, passed in 2010, that granted the same direct-to-retailer-and-consumer privileges to New Jersey growers, but at the expense of out-of-state wineries. The new licenses created by the law fall into two categories: (1) a Plenary Winery License, available for $938 and (2) a Farm Winery License (which limits production to “not more than 50,000 gallons per year”), available for between $63 and $375 depending on production volume. Both licenses allow growers that produce “not more than 250,000 gallons per year” to distribute wine directly to retailers for an additional fee. Retail shipping fees are graduated depending on the amount of wine produced each year, and range from $100 to $1,000. In addition, growers may ship up to twelve cases of wine per year, directly to any individual consumer located anywhere inside or outside New Jersey. Finally, growers may also open up to 15 “salesrooms” throughout the state for sampling on the premises and for retail sale and consumption on and off the premises. The fee for each salesroom is $250.

As a result of these changes, New Jersey’s burgeoning wine industry – largely based in South Jersey – has its eyes set on developing a premier wine destination on the East Coast. At least three new wineries have been licensed in South Jersey since Governor Christie signed the bill into law in mid-January. There are now more than 50 wineries in the state, and many more are planned. Advocates hope the nascent industry will continue to create jobs and bring much-needed revenue into the state.

* Photo courtesy of dan / FreeDigitalPhotos.net.

Brett S. Theisen is an Associate in the Gibbons Financial Restructuring & Creditors' Rights Department.

Final ARRCS Rules Adoption Published in NJ Register

David A. Brooks — Mon, 07 May 2012 16:20:11 -0500

To fully implement the Site Remediation Reform Act, the New Jersey Department of Environmental Protection (NJDEP) has published a notice of adoption of amendments to the Administrative Requirements for the Remediation of Contaminated Sites (ARRCS rules), N.J.A.C. 7:26C in the New Jersey Register today, May 7, 2012. This adoption also amends several other rules related to site remediation in New Jersey, including the repeal and replacement of the Technical Requirements for Site Remediation, N.J.A.C. 7:26E, and amendments to the Industrial Site Recovery Act rules, N.J.A.C. 7:26B. This rule adoption is concurrent with the final May 7, 2012 deadline for almost all remediating parties to engage a Licensed Site Remediation Professional to conduct remediations in NJ.

David A. Brooks is a Director in the Gibbons Real Property & Environmental Department.

Cause for Concern? NJDEP to Score Contaminated Sites Under the Remedial Priority Scoring System

Sandro G. Ocasio — Wed, 18 Apr 2012 14:06:19 -0500

The New Jersey Department of Environmental Protection ("NJDEP") will soon release scores for contaminated properties pursuant to the Remedial Priority Scoring ("RPS") system. The RPS system was mandated by the Spill Compensation and Control Act (N.J.S.A. 58:10-23.16) as amended by the Site Remediation Reform Act ("SRRA").

Under the statute, the factors that NJDEP may consider in ranking the sites include:

the level of risk to the public health, safety, or the environment;
the length of time the site has been undergoing remediation;
the economic impact of the contaminated site on the municipality and on surrounding property; and
any other factors deemed relevant by the NJDEP.

The RPS system is a computerized modeling system designed to help the Department to categorize sites based on potential risk to public health, safety or the environment. The RPS model utilizes a variety of information, including ground water, soil, and vapor intrusion, sampling data to determine a site score. Once the RPS score is determined, the site is catalogued for relative ranking against sites with similar scores and assigned a specific category number from 1 through 5. Category 1 represents the lowest score (least potential risk to public health) and Category 5 represents the highest score (greatest potential risk to public health).

Should the RPS scores trouble remediating parties? On the one hand, the Department states that it will use the RPS system simply to assist it in allocating its Site Remediation Program resources and that categories represent potential risk and are not indicative of compliance. On the other hand, NJDEP admits that the RPS system is a tool to help it evaluate if direct oversight of remediation activity by the NJDEP is warranted now that the typical remediation will be overseen by a private Licensed Site Remediation Professional. Indeed, N.J.S.A. § 58:10C-27(b)(4) states that a site ranked by the “category requiring the highest priority pursuant to the ranking system” may be subject to direct oversight.

But fear not. NJDEP advises that “if a Category 5 site is being actively remediated pursuant to the regulations and in compliance with the mandatory and regulatory timeframes then it would not be considered for direct Department oversight.” Additionally, the responsible party is allowed a one-time opportunity to review their initial score and category and may provide NJDEP with supplemental information that should have been submitted if it believes the initial score is based on old or incorrect data. Therefore, direct oversight is not automatic, however, a party expecting a Category 5 ranking should be diligent in ensuring it is in compliance with all regulations. A party receiving a Category 5 ranking will have the opportunity to convince NJDEP that it deserves a lower score.

NJDEP anticipates that the category determinations will be finalized and posted on the SRP website in September of 2012. Originally, NJDEP intended to send letters to responsible parties with their draft scores last November. This exercise was pushed back, but will need to occur by June in order for NJDEP to have a sufficient comment and review period prior to the September posting. After September, NJDEP will then update its listing during the first year at 6 month intervals and then quarterly from that point forward.

Sandro G. Ocasio is an Associate in the Gibbons Real Property & Environmental Department.

Nancy Lottinville to Speak at PLI's NJ Basic Law CLE Marathon Program on Real Estate Closing Procedures

Gibbons P.C. — Mon, 09 Apr 2012 12:37:46 -0500

Nancy A. Lottinville, Esq., Counsel to the Gibbons Real Property & Environmental Department, will speak at the Practicing Law Institute’s New Jersey Basic Law CLE Marathon on May 29, 2012. Nancy will present on New Jersey real estate closing procedures.

The all-day program is designed to satisfy part of the newly instituted mandatory continuing legal education requirements in New Jersey and to hone legal professionalism. In accordance with New Jersey’s requirements, this one-day program will include New Jersey-specific instruction and discussion on topics authorized by the Supreme Court of New Jersey Board of Continuing Legal Education, including Civil Trial Practice, Criminal Trial Practice, Basic Estate Adminsitration, Real Estate Closing Procedures, Trust and Business Accounting and New Jersey Professional Responsibility and Ethics.

Nancy’s presentation will cover Real Estate Closing Procedures, including:

Classes of property and types of ownership
Land use controls and regulations
Financing and the mortgage market mandated disclosures
Transfer of property

For those unable to attend, the program is also being webcast. For more information and to register for the program, click here.

Gibbons Real Property & Environmental Lawyers Listed as Leaders in Their Fields

Gibbons P.C. — Thu, 05 Apr 2012 09:34:54 -0500

Twelve lawyers in the Gibbons Real Property & Environmental Department were listed by New Jersey Super Lawyers and New Jersey Super Lawyers Rising Stars as leaders in their fields. In addition, Russell B. Bershad, Co-Chair of the Gibbons Real Property & Environmental Department, was listed as a top 100 attorney in New Jersey. Overall, 69 lawyers in the firm were featured in these two publications.

The following members of the department were listed in the 2012 issue of Super Lawyers:

Russell B. Bershad, Real Estate, Co-Chair of the Gibbons Real Property & Environmental Department
Irvin M. Freilich, Environmental Litigation
Howard Geneslaw, Land Use/Zoning
Douglas J. Janacek, Land Use/Zoning, Co-Chair of the Gibbons Real Property & Environmental Department
John H. Klock, Construction/Surety
Susanne Peticolas, Environmental

Those listed in the Rising Stars section were:

Michael Miceli, Land Use/Zoning
Sandro G. Ocasio, Environmental Litigation
Uzoamaka N. Okoye, Business Litigation
Jennifer M. Porter, Land Use/Zoning
Jennifer P. Smith, Real Estate
Jason R. Tuvel, Land Use/Zoning

Gibbons Environmental Attorneys Publish in New Jersey Law Journal

Gibbons P.C. — Wed, 04 Apr 2012 09:14:02 -0500

Irvin M. Freilich, Team Leader of the Gibbons Environmental Practice, Susanne Peticolas and Paul M. Hauge (Director and Associate, respectively) authored the lead article in the Environmental Law section of the February 27, 2012, New Jersey Law Journal. The article, entitled “Step Aside or Step Up?,” discusses recent decisions from the New Jersey Appellate Division in Magic Petroleum Corp. v. Exxon Mobil Corp. and from the Third Circuit in Raritan Baykeeper v. NL Industries, Inc. These environmental cases involve the often-confusing doctrine of primary jurisdiction, under which courts -- sometimes -- abstain from rendering a decision in a given case to allow an expert agency to make its own determination first. You can read the entire article here.

NJ Bulk Sales Notification Requirements

Gibbons P.C. — Mon, 02 Apr 2012 15:22:23 -0500

Russell B. Bershad, Co-Chair of the Gibbons Real Property & Environmental Department and Peter J. Ulrich, a Director in the Gibbons Corporate Department, recently co-authored an article published in the New Jersey Law Journal entitled, “N.J. Bulk Sales Notification Requirements: Recent Changes and Guidance.” The article describes key issues of concern with applicability of the law which was broadened significantly in 2007 and then scaled back last fall.

The article outlines the notification and escrow process and also highlights potential pitfalls that arise in special cases. To read the complete article, click here.

Jennifer Porter to Speak at New York CLE Program on the State Environmental Quality Review Act (SEQRA)

Gibbons P.C. — Thu, 29 Mar 2012 11:12:52 -0500

Jennifer M. Porter, Esq., a Director in the Gibbons Real Property & Environmental Department, will be a speaker at Lorman’s New York CLE Program SEQRA, on Thursday, June 7, 2012, in Long Island (Carle Place), New York.

The all-day program will provide a comprehensive overview of New York’s State Environmental Quality Review Act (SEQRA) including specific discussion on regulatory requirements and compliance, analysis methodologies and techniques of SEQRA, recent trends and case law, incorporating renewable resources into the planning process and environmental review of public/private partnerships. Ms. Porter will be part of the morning panel and will be discussing SEQRA basics, including applicable state and local regulations, SEQRA processes and procedures, agencies and decisions subject to SEQRA, determining “significance,” and EIS preparation and review.

The program is designed for attorneys, engineers, architects, city and county planners, environmental professionals, presidents, vice presidents, water resource specialists, public works directors, surveyors and project managers. For more information and to register for the program, click here.

Groups Sue NJDEP to Block Waiver Rule

Paul M. Hauge — Wed, 28 Mar 2012 08:56:20 -0500

As we recently reported, the New Jersey Department of Environmental Protection (NJDEP) announced on March 8 that it had finalized a new waiver rule that will permit the department to relax environmental rules in certain limited circumstances. It took a coalition of environmental and labor groups just two weeks to file a lawsuit challenging the new rule.

The legal challenge was predictable, given the overwhelming response to NJDEP’s March 2011 proposal, which drew comments from over 500 members of the public. The announcement of the lawsuit again revealed sharp divisions about the wisdom and legality of the rule . Those challenging the rule claim that it violates separation-of-powers principles and undercuts important environmental protections, while the rule’s supporters see it as a carefully circumscribed tool for providing needed flexibility.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

Unanimous Supreme Court Allows Pre-Enforcement Review of Clean Water Act Compliance Orders

Paul M. Hauge — Mon, 26 Mar 2012 11:30:35 -0500

The U.S. Supreme Court unanimously held on March 21 that an Idaho couple who had received a compliance order from the U.S. Environmental Protection Agency (EPA) for allegedly illegal filling of wetlands could directly challenge the order in court, and did not have to wait until EPA filed a lawsuit to enforce the order in court before obtaining judicial review of its validity. The opinion completely changes the rules of the game in EPA’s enforcement of the Clean Water Act, and gives landowners a powerful new tool to dispute what they see as erroneous EPA determinations.

The Idaho landowners, Michael and Chantell Sackett, received a compliance order after filling a portion of their residential lot near Priest Lake in preparation for the construction of a home. According to the order, EPA had concluded that their property contained wetlands protected by the Clean Water Act, and that they had violated the statute by filling wetlands without a permit from the Army Corps of Engineers. It also ordered the Sacketts immediately to restore the site. Believing that their lot did not, in fact, contain any protected wetlands, the Sacketts sought a hearing with EPA, but their request was denied. They then filed a lawsuit in federal district court challenging the order as “arbitrary and capricious” under the Administrative Procedure Act (APA). The district court dismissed their suit, and the Ninth Circuit affirmed the dismissal.

Writing for the Court, Justice Scalia needed just ten pages to conclude that the EPA’s issuance of the compliance order was a final agency action reviewable under the APA. It was clearly final, he wrote, because it determined the Sacketts’ rights and obligations and because legal consequences flowed from it -- including, importantly, a doubling of the penalties they could face in a future EPA enforcement action from as much as $37,500 per day (for violating the statute) to as much as $75,000 per day (for violating the statute and the order as well). The order also made it more difficult for them to obtain an “after-the-fact” permit for their activities. It did not matter, Justice Scalia continued, that the order invited the Sacketts to engage in “informal discussions” of its requirements and to point out any inaccuracies. EPA had no obligation to reconsider its original findings, which were, for all intents and purposes, final.

The Court also rejected various arguments raised by the government that the Clean Water Act impliedly precluded judicial review of compliance orders. (Some other environmental statutes, such as CERCLA, expressly bar pre-enforcement review of EPA orders.) One factor cited by EPA -- that allowing pre-enforcement review of compliance orders will make EPA less likely to use them, and thus make enforcement work more cumbersome -- is an inevitable result, said Justice Scalia, of the APA’s presumption of judicial review, which is “a repudiation of the principle that efficiency of regulation conquers all.”

The Sackett decision throws open the courthouse doors for landowners who, like the Sacketts, believe that the EPA has acted arbitrarily, capriciously, or illegally in issuing a Clean Water Act compliance order. The specific finding that the Sacketts wanted to challenge -- that the property in question contained wetlands that fell within the agency’s Clean Water Act jurisdiction -- is likely to be controversial in many cases, given the failure of Congress, the agencies, and the Supreme Court itself to fashion clear rules for deciding whether particular wetlands are “wetlands” for purposes of the Clean Water Act. Now, landowners who believe they have been incorrectly cited for violating the statute need not wait for EPA to drop the other shoe by filing its own lawsuit, all the while accumulating thousands or millions of extra dollars in additional civil penalties. As Justice Alito put it in his concurring opinion, “In a nation that values due process, not to mention private property, such treatment is unthinkable.” After Sackett, it is no longer unavoidable.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

The Extension of the Permit Extension Act is on the Move, To Be Reviewed Today By Assembly Appropriations Committee

Jason R. Tuvel — Mon, 12 Mar 2012 15:15:44 -0500

About two months ago, several NJ Legislators, including State Senator Paul Sarlo (Bergen/Passaic) and Assemblyman Ronald Dancer, proposed bills that would amend the 2008 “Permit Extension Act.” Designed to give developers breathing room in the sluggish economy by extending the validity of development approvals, Proposed Bill S743 (the “Bill” or “S743”) is gaining traction and is moving through the necessary legislative committees. On March 5, 2012, S743 passed by a vote of 4-0 by the Senate Budget and Appropriations Committee. The Bill is scheduled to go before the Assembly Appropriations Committee on March 12, 2012.

Under the current version of the Permit Extension Act, the expiration of all “approvals” that were granted during the “extension period” as defined in the statute have been tolled through December 31, 2012. The “extension period” is currently defined as “the period beginning January 1, 2007 and continuing through December 31, 2012.” S743 proposes that the definition of the “extension period” be changed so that it runs through December 31, 2014. Therefore, based on the 6-month tolling provision currently in the Permit Extension Act, approvals received during the extension period could be extended as far out as June 30, 2015. It should be noted that A337 proposed to extend the “extension period” through December 31, 2015. However, A337 has not gained the same head of steam as S743.

S743 as amended includes language to make it clear that as it pertains to Statewide planning areas, the definition of “extension area” shall remain in effect until June 30, 2013, or until such later time as the State Planning Commission revises and readopts New Jersey’s State Strategic Plan and adopts regulations to refine this definition. Further, all underlying municipal, county, and State permits or approvals within the Pinelands Area are extended pursuant to the “Pinelands Protection Act,” N.J.S.A. 13:18A-1 et seq.

The definition of “approvals” under the Permit Extension Act covers most permits issued by State rule or regulation, including, preliminary and final approvals for development applications under the New Jersey Municipal Land Use Law. S743 proposes that the definition of “approvals” be amended to include any “agreement with a municipality, county, municipal authority, sewerage authority, or other governmental authority for the use or reservation of sewerage capacity.”

S743 appears to be the bill that may amend the Permit Extension Act to help developers that need to wait a little longer for the economy to bounce back to save projects for which they have spent significant funds in obtaining approvals for development.

Jason R. Tuvel is an Associate in the Gibbons Real Property & Environmental Law Department.

NJDEP Finalizes Waiver Rule

Paul M. Hauge — Fri, 09 Mar 2012 11:10:01 -0500

The New Jersey Department of Environmental Protection (NJDEP) announced on March 8 that it had finalized a new waiver rule that will permit the department to relax environmental rules in certain limited circumstances. The new rule, which grew out of an executive order from Governor Christie that called upon state agencies to apply “common sense principles” in implementing and enforcing legal requirements, will be formally published on April 2, 2012 and will become effective on August 1, 2012.

NJDEP’s March 2011 proposal for the waiver rule generated many hundreds of comments from over 500 members of the public. The agency also held a public hearing on the proposed rule, where most speakers opposed it. The final rule reflects some modifications to the original proposal, but retains its basic thrust: to allow NJDEP to waive strict compliance with its rules in limited circumstances, in a manner that is consistent with the agency’s environmental mission.

A waiver may be granted only when at least one of the following criteria are satisfied: (1) the applicant is subject to conflicting rules, (2) strict compliance would be unduly burdensome, (3) the waiver would result in a net environmental benefit, or (4) the waiver is justified by a public emergency. The waiver rule does not apply to a number of categories of requirements, including requirements imposed by statute or by federal regulations; numeric or narrative standards that protect human health; and requirements concerning remediation funding sources and other financial matters.

NJDEP has yet to work out the details of the process for the submission and review of waiver applications. It will not accept applications until August 1. Training sessions for those interested in learning about the process will begin in April.

A courtesy copy of the final rule is available on NJDEP’s website.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Law Department.

NJDEP Clarifies Impact of Site Remediation Reform Act on Requirements of Administrative Consent Orders and Remediation Agreements

David A. Brooks — Tue, 14 Feb 2012 12:12:22 -0500

With full implementation of the Site Remediation Reform Act on the horizon, the New Jersey Department of Environmental Protection (NJDEP) recently clarified that for parties currently proceeding with remediation under NJDEP oversight pursuant to an Administrative Consent Order (ACO) or Remediation Agreement (RA), such parties will be expected to engage a Licensed Site Remediation Professional no later than May 7, 2012. Any ACO/RA requirements to obtain NJDEP pre-approval of reports and workplans will be held in abeyance. Likewise, any ACO/RA specific timeframes will also be held in abeyance. Instead, responsible parties must meet all regulatory and mandatory timeframes prescribed in applicable rules. However, the ACO/RA will otherwise remain in effect until the remediation is complete or covered by a remedial action permit and parties will be subject to, among other requirements, the remediation funding source requirements and stipulated penalties.

David A. Brooks is a Director in the Gibbons Real Property & Environmental Law Department.

The Time for Electronic Recording is Now: New Jersey Passes New Law Updating Title Recordation Procedures

Nicole E. Taplin — Fri, 27 Jan 2012 12:47:56 -0500

In our electronic age, New Jersey’s antiquated laws governing document recordation were in serious need of some updates. A new law was recently passed modernizing the New Jersey Statutes by requiring the acceptance of electronic alternatives to paper documents, in addition to paper documents. In addition, provisions of the statute, disbursed over various sections that logically belonged together, have been compiled in a more concise and coherent fashion, and antiquated language and procedures have been removed. The revisions clearly result in a much more reader- friendly version of the law relating to title recordation in New Jersey.

Assembly Bill A-2565 P.L.2011, c.217 revising the New Jersey statutes pertaining to the recording of title documents was signed into law by Governor Christie on January 17, 2012. The New Jersey Law Revision Commission (NJLRC) approved this revision project following the enactment of the federal Electronic Signatures in Global and National Commerce Act (E-sign), and New Jersey’s enactment of the Uniform Electronic Transactions Act (UETA). The legislative statements (Statements) issued by the Senate Community and Urban Affairs Committee (Senate) and Housing and Local Government Committee (Assembly) related to A-2565 note that “while the use of electronic deeds and mortgages is not expected to occur in the near term, both E-sign and UETA encourage the development of systems that will accept electronic documents without disrupting the ongoing process of title recordation.”

Title 46, chapters 15 to 26 of the New Jersey statutes currently govern the recording and indexing of title documents. Most of these statutes were written when recording meant storing and including paper documents in large books. Amendments then allowed recording offices to microfilm documents and later permitted the use of any other method of recording that was “in conformance with rules, standards and procedures promulgated by the Division of Archives and Records Management (Division) in the Department of State (Department) and approved by the State Records Committee pursuant to its authority under section 6 of P.L.1994, c.140 (C.47:1-12) and the “Destruction of Public Records Law.” The recording system is intended to be fluid, preventing its extinction, by allowing for the approval of new methods of recording documents as recording technology advances. However, as the Senate and the Assembly note, with an increase in the use of new recording methods, comes an increase in the need for regulatory authority to assure uniformity.

The new law is a significant revision to Title 46 in many ways including the addition of three new chapters, chapters 26A, 26B, and 26C, replacing and repealing certain sections, and the legislature’s attempt to simplify the statutes by “combining overlapping provisions and deleting unnecessary ones,” simplifying language and reassembling numerous sections. Some of the material, substantive revisions as highlighted in the NJLRC’s comments include (but are not limited to):

TITLE 46, CHAPTER 26A, RECORDING:

Definition added: “Document” includes both: (1) Paper documents, and (2) Electronic documents, documents created, communicated or stored by electronic means.
Definition added: A document is “recorded” if (1) The document or its image has been placed in the permanent records of the recording office, and (2) The document has been indexed as provided by this chapter. Prior to this revision, the statutes did not state directly what is meant by “recording” and the NJLRC notes that cases were not consistent as to when a document is recorded.
Documents that may be recorded: The portions regarding the recording of instruments concerning personal property have been deleted since as the NJLRC notes, “Liens against personalty, other than personalty that is or will be fixtures, are recorded by filing a UCC form with the division of Commercial Recording.”
Prerequisites for recording: The opening language has been changed to facilitate the electronic filing of documents such that the recording office need not receive an original document to record and an image will suffice if certain requirements are met.
Form of documents and maps; cover sheet or electronic synopsis: The section preserves the ability to file paper documents but also allows for acceptance of electronic documents. Authority is given to the Division of Archives and Records Management to establish statewide form requirements for electronic recording. The form requirements for maps are also now included in this section.
Duty to record; recording officer's books, methods: This section states requirements for recording standards and methods including the requirement that the method produces a clear, accurate and permanent image of a document and a method that allows the document to be found by the indexes maintained. References to other books for different kinds of documents required by Title 46 or other law have been deleted, with the NJLRC noting that this revision allows for a single set of books and indexes for newly-recorded documents. The revision also permits unique identifying numbers to be used in addition to book and page numbers. Time limits for recording or rejection of a document by recording officers are also added.
Sequence of recording: This section is new in that it allows the person submitting two or more documents at the same time to determine the order in which they are recorded rather than having the recorder record according to the priority of their dates.
Documents filed as provided by other statutes: This section provides that documents that are now “filed” pursuant to other laws be recorded and indexed with recorded documents using the same methods. The NJLRC notes that this change will not only simplify the recording office processes, it will allow a single search to disclose all county-filed or county-recorded documents that affect real estate.
Notices of settlement: This section clarifies that one notice of settlement can be recorded for a conveyance and a mortgage and the form of the notice has been slightly simplified. The timeframe for effectiveness for the notice is changed from 45 days to 60 days from the date of recording and the effective period may be extended for one period of 60 days by recording an additional notice of settlement before the expiration or discharge of the notice of settlement.
Effect of recording: The revision requires that documents have to actually be recorded to give notice. The new definition of “recording,” as noted above, requires that a document be indexed and placed in the permanent records of the recording office. In addition, the revision does not require that a document be duly acknowledged or proved and certified to have the effect of notice. The section that limits the notice effect to documents on record for six years despite defects in acknowledgement, proof or certificates has been removed. As long as a document is recorded, notice is effective. The revision goes further to state that a deed or other conveyance of an interest in real estate shall be of no effect without notice. The NJLRC notes that the section “embodies one of the basic principles underlying the recording statutes, that an unrecorded document is ineffective against later claimants who have no notice of it…If a party makes a conveyance in a form that does not permit it to be recorded, then a subsequent bona fide purchaser, mortgagee or creditor who could not learn of the conveyance from the land records is not bound by the conveyance absent notice of it at the time he acquired the interest for value or docketed the judgment. This principle is in accord with the statute of frauds, 25:1-11, which makes unwritten conveyances enforceable as conveyances only in some cases where possession is transferred. Transfer of possession frequently is notice to prospective purchasers or mortgagees.

TITLE 46, CHAPTER 26B, MAPS:

The substance of most of the sections pertaining to maps remains unchanged. Some sections have been reworded or rearranged. In the section entitled “Filing and indexing of maps, fee,” references to the way that maps are stored and the format of a map and its copies have been deleted, and, the new law seems to aim to allow for technological advances in map filing.

TITLE 46, CHAPTER 26C, GENERAL AND TRANSITIONAL:

Regulations: This section states that the Division in consultation with the County Clerks and Registers of Deeds shall adopt regulations to establish format and technical requirements for recorded documents to foster state-wide uniformity in title recordation and otherwise to implement the new law. Regulations shall be adopted within 12 months after the effective date of the new law.

Uniform Electronic Transactions Act (UETA) superseded: This section states that to the extent that the new law conflicts with Sections 17 and 18 of the UETA, the new law supersedes. The new law modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act but does not modify, limit, or supersede Section 101(c) of that act or authorize electronic delivery of any of the notices described in Section 103(b) of that act.

Review of Document Filing and Recording Fees: Within 2 years of the effective date of the new law, the Division and the Department shall adopt rules and regulations requiring county clerks and registers of deeds and mortgages to report the number of documents recorded or filed and all document filing and recording fees that are collected by their offices, categorized by document type, to the Division and to the Department. The goal of the rules and regulations will be to develop and implement a standard form and procedure for county clerks and registers of deeds and mortgages to utilize so as to report on the foregoing in a clear and concise manner. Within 3 years of the effective date of the new law, the Division and the Department will issue an interim report on same and within 4 years, a final report. The report will specify an average state-wide fee for the filing or recording of each type of document and may contain recommendations of the division and the department to the Legislature for the establishment of standard per document filing and recording fees. 5 years after the date of adoption of the new law, the Legislature shall consider the establishment of standard per document filing or recording fees.

In summary, the new law better accommodates the recording of electronic alternatives to paper documents and will guide the development of uniform recording procedures as we progress from a technological standpoint. It will be interesting to watch how the law relating to title recordation in New Jersey evolves in our rapidly changing information age. As many county clerks and lawyers have already discovered, there will come a day when electronic recordings and filings will be mandatory because of the potentially prohibitive expense of maintaining two systems, one for paper and one for electronic alternatives. The current legislation moves our system one step closer to a world in which all of our documents will be filed and recorded electronically. As with all regime changes, advantages and disadvantages will result. For now, Happy E-recording.

Nicole E. Taplin is an Associate in the Gibbons Real Property & Environmental Department.

Jennifer Porter to Speak at New York CLE Program on State Environmental Quality Review Act (SEQRA) Litigation Issues

Gibbons P.C. — Thu, 26 Jan 2012 09:10:43 -0500

Jennifer M. Porter, Esq., a Director in the Gibbons Real Property & Environmental Department, will be a speaker at Lorman’s New York CLE Program SEQRA, on Friday, March 9, 2012 in Latham, New York.

The all-day program will provide a comprehensive overview of New York’s State Environmental Quality Review Act (SEQRA) including specific discussion on regulatory requirements and compliance, the integration of SEQRA with the project review process, cumulative impacts and segmentation and how to use SEQRA to obtain a better project without bankrupting the applicant. Ms. Porter will be part of the afternoon panel and will be discussing SEQRA litigation issues including the statute of limitations, standing to sue, defending or attacking negative declarations and procedural and substantive judicial review.

The program is designed for attorneys, engineers, architects, city and county planners, environmental professionals, presidents, vice presidents, water resource specialists, public works directors, surveyors and project managers. For more information and to register for the program, click here.

The Permit Extension Act May Keep Extending

Jason R. Tuvel — Tue, 24 Jan 2012 09:09:54 -0500

Apparently concerned that the economy may not be recovering rapidly enough, the 215th New Jersey Legislature now convened, introduced a new bill (A337) on January 10, 2012, by Assemblyman Ronald S. Dancer of District 12, to change the definition of the “extension period” under the Permit Extension Act so that it runs through December 31, 2015. Therefore, based on the 6-month tolling provision currently in the Permit Extension Act, approvals received for development applications during the extension period could be extended as far out as June 30, 2016. Bill A337 has been referred to the Assembly Housing and Local Government Committee.

In 2008, as the economy was sliding into recession, the New Jersey Legislature passed the “Permit Extension Act,” which tolled the expiration of all development approvals that were granted during the “extension period” as defined in the statute. The intent was to preserve the benefit of permits until the economy improved. The “extension period” is currently defined as “the period beginning January 1, 2007 and continuing through December 31, 2012.” The definition of “approvals” under the Permit Extension Act covers most permits issued by State rule or regulation, including, preliminary and final approvals for development applications under the New Jersey Municipal Land Use Law.

If signed into law, Bill A337 could provide developers with an opportunity to wait a little longer for the economy to turn around in order to build projects that have received approvals and are considered dormant at the present time.

Jason R. Tuvel is an Associate in the Gibbons Real Property & Environmental Department.

New Jersey Grants Out-of-State Wineries Direct Access to Consumers & Retailers

Brett S. Theisen — Mon, 23 Jan 2012 13:43:49 -0500

On January 17, 2012, Governor Chris Christie signed into law a bill allowing out-of-state winemakers to sell directly to New Jersey consumers and retailers. The bill was in response to the Third Court’s decision in Freeman v. Corzine, which we reviewed on this blog a year ago. The decision invalidated a New Jersey law allowing certain New Jersey farmers and wineries to skip wholesalers and sell directly to retailers and consumers. The Court determined that the law ran afoul of the Constitution’s Dormant Commerce Clause because it imposed restrictions benefiting in-state wineries and farmers at the expense of their out-of-state competitors. This new law is intended to balance the competing rights of in-state and out-of-state wineries.

The Third Circuit ordered the case remanded to the District Court to remedy the constitutional violation. In short, the District Court was being asked to choose between (1) extending the same in-state privileges to out-of-state wineries and farms, or (2) nullifying the privileges enjoyed by in-state wineries and farms. Rather than leaving the matter with the courts, state legislators introduced several competing bills aimed at resolving the violation. On July 25, 2011, at the request of all parties, the District Court ordered the case “administratively terminated” through March 2012 in anticipation of a legislative resolution.

After months of back and forth negotiations, the new law finally garnered enough votes to pass on the final day of the 2010-2011 legislative session. The law is a compromise measure that will resolve the constitutional issues identified in Freeman v. Corzine and protect New Jersey wine growers’ right to sell directly to consumers. As a result, the District Court litigation has been rendered moot.

Specifically, the new law creates a new “Out-of-State winery license,” available to applicants that do not produce more than 250,000 gallons of wine per year and are duly licensed in another state. The new license permits direct sales to New Jersey consumers, including internet sales. Out-of-State licensees will also be permitted to sell directly to consumers at up to 16 tasting-room locations in the State (compared to 15 locations for In-State wineries). Direct sales and distribution to retailers are also permitted for an additional fee. The new law will take effect on May 1, 2012.

Brett S. Theisen is an Associate in the Gibbons Financial Restructuring and Creditor's Rights Department.

EPA Seeks Outside Reviewers for Draft Report That Showed Groundwater Contamination from Fracking

Paul M. Hauge — Thu, 19 Jan 2012 09:19:02 -0500

In December, we reported on the release of a draft report from United States Environmental Protection Agency’s (EPA) Office of Research and Development on a possible link between groundwater contamination in some Wyoming wells and hydraulic fracturing (“fracking”) activity in the area. Now, as promised, EPA is initiating an independent assessment of the report by outside peer reviewers.

The EPA report garnered intense attention from both proponents and opponents of fracking, which extracts natural gas from underground rock formations through the pumping of a pressurized mixture of water, sand, and chemicals that creates cracks, or fractures, in the rock, allowing the trapped gas to escape, flow into the well and up to the surface. Concerns over groundwater contamination could delay or limit fracking in New York, Pennsylvania, and a number of other states.

EPA published a Federal Register notice on January 17, 2012 that seeks nominations for experts to review the draft report as well as all public comments received during a comment period that will close on January 27. An EPA peer review contractor will select five to seven outside reviewers from among those nominated.

The agency is looking for recognized experts in a variety of fields (e.g., petroleum engineering, hydrology, geophysics, and water quality) who have no financial conflicts of interest or whose position would otherwise create an appearance of a lack of impartiality. Nominations (preferably via e-mail) must be submitted by February 17.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.