The New Jersey Department of Environmental Protection (NJDEP) is considering significant amendments to its site remediation regulations, which could have major consequences for commercial real estate transactions in New Jersey. If enacted, these changes would negatively affect buyers and sellers of commercial real estate, lenders, and legal professionals by introducing new mandatory reporting requirements during the real estate due diligence process.
What would Change?
On January 31, 2025, NJDEP started its review of public comments regarding the proposed amendments to the Site Remediation Reform Act 2.0 (SRRA 2.0). The most controversial proposed change involves mandatory environmental reporting obligations that could reshape how commercial real estate transactions are conducted in New Jersey:
- Buyers and their environmental professionals must report newly discovered contamination to NJDEP during real estate due diligence.
- Anyone with knowledge of contamination—regardless of their role—must report it to NJDEP.
Why This Matters for New Jersey Real Estate
If implemented, these changes could have a far-reaching impact on commercial real estate transactions, affecting:
- Financing – Lenders could tighten loan restrictions due to increased environmental risks.
- Due Diligence Compliance – Sellers and Buyers and their professional teams would face greater reporting obligations, increasing transaction complexity and cost.
- Transactional Agreements – Sellers would adjust negotiation strategies and deal structures to accommodate the new regulations.
What’s Next for Commercial Real Estate Stakeholders?
At this stage, NJDEP is still reviewing comments and considering revisions before finalizing the new rule. The potential regulatory changes could alter the landscape of commercial real estate in New Jersey, making it crucial for property owners, buyers, and professionals to stay informed.
