New Rule Would Devastate Most Brownfield Redevelopment
Last November, NJDEP proposed voiding current law and instead mandating the reporting of contamination discovered during due diligence by prospective buyers and their professionals, even non-LSRPs. Such reporting would trigger liability for the current owner even if the proposed sale did not go through – a risk most sellers would not want to take. The brownfield redevelopment community testified during the rule comment period that the proposed rule would kill the vast majority of brownfield transactions. Yet, despite such fierce opposition and compelling logic on the side of fostering brownfield redevelopment, NJDEP has announced that it is re-proposing this controversial rule.
Numerous opponents of the proposed rule correctly noted that that NJDEP advocated for the same broad reporting requirement when the 2009 Site Remediation Reform Act (SRRA) and the 2019 SRRA amendments were being debated by the State Legislature. Both times, legislators rejected NJDEP’s broad reporting policy position, instead favoring the current law as fostering brownfield redevelopment. Nonetheless, NJDEP continues to pursue its goal of implementing the broad reporting policy as a regulation.
In today’s adoption, NJDEP selected the controversial “due diligence” rule for special consideration by placing the proposal on a track for separate rulemaking. NJDEP has indicated that the comment period for the re-proposal will end January 16, 2026 with a public hearing to be held at 1 p.m. on December 17. Hence, the issue will not be decided until after the new Sherrill Administration takes office in January.