Industrial Site Recovery Act
New Jersey's Industrial Site Recovery Act ("ISRA") governs the requirements for industrial property transactions in New Jersey and is intended to ensure that businesses apportion environmental liability at the time of sale. However, it is the most stringent law of its kind in the nation and can significantly complicate commercial transactions.
ISRA is triggered by the closure or transfer of ownership of a property meeting three criteria:
- The property must have a North American Industry Classification System (NAICS) code listed in N.J.A.C. 7:26 B.
- The place of business must have been engaged in operations on or after December 31, 1983.
- The place of business must involve the generation, manufacture, refining, transportation, treatment, storage, handling, or disposal of hazardous substances or hazardous wastes.
Pursuant to ISRA and its implementing regulations, a seller of industrial property must obtain the approval of the New Jersey Department of Environmental Protection ("DEP") prior to completing the transaction. In order to obtain the approval of the DEP, a seller must demonstrate that the property does not require remediation or that there is a remediation plan in place. This can be an onerous and time consuming process with the potential to delay or hinder transactions. In addition, ISRA transactions are now subject to the new procedures and requirements of the Site Remediation Reform Act, New Jersey's recently enacted environmental remediation reform legislation.
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Contact Morris, Downing & Sherred.
The attorneys at Morris, Downing & Sherred, LLP have substantial experience navigating the requirements of ISRA. We assist our clients by providing effective management through all phases of environmental investigation and remediation and have long provided our clients with the sound advice on environmental compliance issues necessary to facilitate successful commercial transactions.
