The New Jersey Lead Safe law went into effect on July 22, 2022, and affects ALL pre-1978 rental properties.    The law is being called the Lead-Based Paint Hazard Law and affects all single-family, two-family, and multiple-rental dwellings.

Did you know that 30% of properties are failing the lead inspections because the owner is not aware of what the lead inspection entails? The Lead Risk Assessment accounts for 100% of properties and is a visual inspection for lead paint in the dwelling interior, which includes common areas, basements, and foyers.

The Lead Safe Inspection is looking for paint that is not in good condition, and that the paint is not on an impact or friction surface, such as a window.   Because most all rentals never had to go through a lead paint inspection, properties fail.

What fails a lead-safe inspection is deteriorating lead-based paint?

• peeling
• chipping
• chalking
• cracking
• damaged paint

At Curren, we have "The Talk" with every landlord, realtor, and property manager about where we look and what are common lead paint fail areas.  If the lead inspection fails as per the law, Curren lets our clients know. If lead-based paint hazards are identified, then the owner of the dwelling shall remediate the hazards through abatement or lead-based paint hazard control mechanisms.  If one of our lead inspectors finds deteriorated paint, the owner must repair the damage, and a reinspection must occur.  So wouldn't it be smart that if the paint needs to be fixed you should fix it before we inspect?

What to do to get ready for compliance?  Call Curren Environmental, we have been consulting on environmental issues in real estate since the 1990s.  888-301-1050

Example: See the radiator below, it failed the inspection, although we spent 40 minutes discussing the inspection process with the owner and the realtor.

This property failed as well.  We actually saw paint chips on the floor.

Painted surfaces that rub, can damage the paint and release lead dust, which is a failure.  In the photo below you can imagine the door rubs, to the extent paint is chipping off.

As per The NJ Lead Law:  Lead dust can form when lead-based paint is scraped, sanded, or heated. Dust also forms when painted surfaces bump or rub together. Lead chips and dust can reside on surfaces and objects that people touch.

What does the lead law mean to property owners?

Your rental unit must be clean and all paint intact and conditions present that will not cause the paint to become damaged.  As the photo above shows, doors that rub would be a fail.The law also means you as a landlord must be diligent in maintaining your rental units, even more so than in the past.   Yes it is a pain and you may consider it nitpicky, but that is the law in NJ.  We had many property owners sell before the law went into effect.

What are the requirements of municipalities under P.L. 2021, c. 182?

Pro Tip

The law also allows the owner to hire their own professional.

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If you offer laundry and it's in the basement and you have walls or built-in cabinets, a permanent fixture,  like the one in the photo below, you would fail the inspection.

When do you have to comply with the NJ Lead Safe Law?

This new lead law is being referred to as, New Jersey’s Lead Safe Certification and requires lead-paint inspections, and visual and/or dust wipes on all nonexempt rental properties at tenant turnover or before July 22, 2024.  This means 1st inspection must be completed by July 22, 2024.   The inspections are perpetual. A lead-safe certificate is good for two (2) years but can last as long as three (3) years before a reinspection is needed if the tenant remains in the unit from the 1^st 2 years of issuance of the lead-safe certificate.

What are the documentation requirement of landlords?

As per the law, the documentation and notification requirements are the responsibility of the landlord.  As an owner/landlord you must:

Maintain and provide copies of all Lead Safe Certifications (per unit) and leases to the DCA inspector during their five (5) year multiple dwelling inspection. 

The lead-safe certification or a reference to the certification is supposed to be attached to the tenant's lease.    We think it is safest to provide a copy of the cert to the lease and if the lease is already executed provide another copy with the lead safe certification attached, it's cleaner and safer.

Curren Environmental has been environmental consulting since the 1990s, if you have questions feel free to contact one of our professionals:

What to do to get ready for compliance?  Call Curren Environmental, we have been consulting on environmental issues in real estate since the 1990s.

888-301-1050

Do you think your property is exempt from lead inspections? The property must meet the following criteria: 

1. The property has been certified to be free of lead-based paint,
2. The property was originally constructed during or after 1978,
3. The rental unit is in a multiple dwelling that has been registered with the DCA as a multiple dwelling for at least 10 years either under the current or a previous owner and has no outstanding lead violations from the most recent cyclical inspection performed on the multiple dwelling under the “Hotel and Multiple Dwelling Law,”
4. Is a single-family or two-family seasonal rental dwelling that is rented for less than 6 months duration each year by tenants that do not have consecutive lease renewals; VRBO rentals fit this definition as long as the lease is shorter than 6 months per rental.
5. Dwellings that have been certified to be free of lead-based paint under N.J.A.C. 5:17-3.6(b).
6. The unit is owner-occupied.
7. Call or office  888-301-1050

Pro Tip

If you have not tested for lead-based paint and the property is pre-1978 original construction, the law states you must assume it is lead-based paint.

Regulations P.L. 2021, c. 182 aka N.J.A.C. 5:28A   aka New Jersey Lead Safe Law,  which requires lead inspection for rental properties built before 1978.

So what rental units are required to be inspected and what dwellings are exempt? 

Lead-based paint was federally banned in 1978.  Almost all single-family, two-family, and multiple-rental dwellings built before 1978 must be inspected.   

Yes that is very encompassing, there are some exemptions which include:

• Rental units were built after 1978. 
• Short-term rental, like VRBO.  Think rentals shorter than 6 months.
• Buildings already certified as Lead-Free.   Pro Tip, you may think your rental unit is lead-free because you rehabbed the entire place, but did you?  Did you replace vanished wood (which has lead), stairs, trim, all walls, including closets, and all doors?  
• Owner-occupied unit.  You own a duplex, you lie in one unit, and no lead inspection is required.  You rent the other unit, and that unit needs to be inspected. 
• Multiple rental dwellings that have been registered with the Department of Community Affairs for at least ten years and have no outstanding lead violations from the most recent cyclical inspection performed on the multiple dwelling under the “Hotel and Multiple Dwelling Law” (N.J.S.A. 55:13A-1).   Ok, agree, if you don't know what that means, your rental unit is likely, not exempt.

New Jersey wants tenants protected from the hazards of lead paint which are well known, represent serious health concerns, and prior to this law was largely not addressed.  Even when you purchase a home to live in, the lead disclosure and evaluation process is an afterthought if performed at all.  We can say from experience 99% of home buyers ignore lead as an issue.  

That said if you own a rental property as detailed above you are subject to the law and must have a lead paint risk assessment completed by July 2024.  Every inspection includes a visual inspection of painted interior surfaces for deteriorated paint (deteriorated paint when found will fail the inspection and will require the owner to address and reinspect.). Certain towns also must have dust wipe sampling performed due to elevated blood lead levels in children in these towns. 

This law did not come out of the blue, Philadelphia, Pennsylvania has had a similar law on the books for years as have other states.  New Jersey is playing catchup.   If you are a landlord and maintain your rentals, this will just be another cost of business, but it will also educate you about current and future lead management in your properties.  Be aware the tenant gets a copy of the lead safe certification which is the desired goal of every inspection.  This in essence is informing the tenant that lead paint is present (it is presumed under the law) and places some responsibility on them to inform the landlord of damage when it occurs. The law knows that homeowners take pride in ownership and are more likely to maintain a home, tenants not so much, and landlords can be a crapshoot.

Want Expert advice, with over 25 years of experience let Curren be your resource.

Monday to Friday  888-301-1050

Many clients come to Curren after purchasing a property and now have an issue with an oil tank. Before purchasing any property, you need to know if the oil tank is LEAKING. This is the most important piece of information you need in regard to an oil tank. The only way to know if your oil tank is leaking into the soil, and to prove it to anyone, including a mortgage company, insurance company, bank, or a local/state governing body is by soil sampling. It is impossible to know if the oil tank has leaked by smell and/or sight, you need the soil analyzed by a certified laboratory for your state's required analysis.

A lot of buyers will accept, “the oil tank was properly closed in place”. Yes, that may certainly have been true of what happened at one time. However, today, regulations have changed and again the most important thing to know is if the oil tank is LEAKING. Many oil tanks are abandoned in place, 10, 20, or 30 years ago. Back in the day,  less than 1% of the time soil samples were acquired to see if the oil tank leaked. Additionally, the method of filling the oil tank in place varies greatly. Standard operating procedures today are to cut a hole in the oil tank, large enough for a person to fit in the oil tank, and clean out the oil tank before filling it in place. Nine times out of ten, a hole has not been cut large enough for someone to fit into and the oil tank has not been properly cleaned. If the oil tank was not properly cleaned, the oil and sludge left behind are now comingled with the material filling the oil tank. That material is now contaminated. Cutting a hole in the top of the oil tank now provides a very easy way for rainwater to get into the oil tank. Over the years the rainwater not only corrodes the bottom of the oil tank but can fill up the oil tank and any leftover oil or sludge can rise to the top, overflow, and contaminate the soil at the bottom. The water can also corrode the bottom of the oil tank and the oil and sludge can contaminate the soils beneath it.

If you are looking to buy a house and cannot confirm the heat source throughout the legacy of the house, you may want to perform a Ground Penetrating Radar (GPR) to determine if an underground oil tank was present. Once you own the home, you own the problem and today completing a GPR as well as a home inspection leads homeowners to uncover oil tanks that had been abandoned in place that they were never made aware of before they purchased the house. Now they want to sell but have to deal with the underground oil tank. Once the oil tank is abandoned the fill port and vent pipe can be cut off and no evidence of the oil tank would be on the ground surface. Two copper lines that feed the heater could be identified in the basement or crawl space by the inspector which is a telltale sign of a former oil tank. Additionally, if there is an aboveground oil tank in the basement, there is a good chance depending on the age of the oil tank in the basement, a oil tank could be buried underground.

The best approach is to ensure that if there was an abandoned oil tank on the property you either get proper documentation the oil tank did not leak or remove the oil tank before buying the property.

In New Jersey or Pennsylvania there is a disclosure list a seller should complete.  Any disclosure is a representation of known facts and are meant to make knowledge about a property available to buyers.  In  New Jersey's there are statutes, the state's courts have carved out rules (under "common law") that are meant to protect buyers against sellers who fail to disclose material facts or who hide information about their property.

The New Jersey Supreme Court, addressed a home sale where the seller failed to mention a cockroach infestation, the courts ruled this oversight as  "silence may be fraudulent." (See Weintraub v. Krobatsch, 64 N.J. 445 (1974).)  So there are court cases where an as is sale and non disclosure spelled bad news for the seller post sale.

It is in your best interest to complete the Sellers Disclosure statement even if it is not required by law.  You must consider that if you were buying a property and no disclosure was completed by the buyer you would question what they may be hiding.  Conversely when you fill out the disclosure, know that it can be considered a legal document.   Withholding facts can create problems later on.   In a perfect world,  sellers would be 100% encompassing on disclosing both the good and bad about a property.

Did you know that if you have your property under contract and the deal falls apart because the buyer found an unknown defect, well that defect is now required to be put on a new disclosure statement.   There is a paper trail that can lead someone who looks for these facts, so honesty is the best policy.

New Jersey has passed laws adding to the disclosure requirements of sellers.  In recent years disclosing awareness of mold water damage and lead in plumbing.   Pertaining to mold or water damage:

◦Yes    No         
[ ]      [ ]               9)        Are you aware of any water leakage, accumulation or 
                                       dampness within the basement or crawl spaces or any 
                                       other areas within any of the structures on the property? 

◦[ ]      [ ]               9a)      Are you aware of the presence of any mold or similar 
                                         natural substance within the basement or crawl spaces 
                                         or any other areas within any of the structures on the 
                                          property? 

Regarding Lead

Bill S-829  signed 11/08/2021 requires property condition disclosure statements to include a question concerning the presence of lead plumbing in residential properties.  For lead this means if the owner had water testing performed for lead it must be disclosed.  

Environmental Disclosure in Residential Real Estate

Informed buyers and sellers should know that asbestos and lead paint were green building products and were banned in the 1970s, so older homes likely have these compounds in the home and the owner likely has never tested for them, they are simple assumed to be present. unless you do a lead paint inspection:   Lead Paint Inspections

The same time frame of pre say 1980's home, oi heat was likely used in the past and the property.  These tanks rust and leak oil costing homeowners Tens of thousands of dollars in environmental cleanup.  Buyers performing due diligence will complete a tank sweep to prevent buying a contaminated property.   Oil Tank Sweep FAQ

Being fair to sellers, many bought a home on natural gas and never did a tank sweep so they may not honestly know if a tank is or was present

Questions?  Free Consultation

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Real Estate Disclosure in an "As Is" sale.

Many sellers want to sell a house "as is." This means that the seller does not intend on making any repairs as part of the sale process.   Generally speaking, "as is" houses are priced lower than market value.

Real estate contracts can have a "as is" clause because the buyer is entitled to inspect and cancel, if warranted, this "as is" clause is often misunderstood by sellers to mean that if the buyer wants the property he has to take it "as is," without any chance to cancel the contract or request repairs from the seller.

The "as is" clause more accurately is a situation where the seller  has no intention of making repairs to the property or even into entering negotiations about repairs. The "as is" clause is accompanied by an inspection clause that permits the buyer to cancel the contract should the buyer's inspections reveal major defects that the buyer is not willing accept the property with.

Major issues could be septic, contamination from an oil tank, mold or structural.  Typically, a dollar amount is put in the contract that will allow the buyer to back out if the cost is above a certain threshold.

Environmental issues in an As Is sale, such as a tank leak tend to bend the seller to address the problem.  The reason an environmental issue can tip the scales in an "As Is" sale is because the cost for cleanup of say $40,000, dings the value of the property and can prevent a mortgage or insurance carrier to get involved.     In theory and as is sale is a wish that s not always granted to sellers.

You can never toss out ethics and even in an as is sale if a seller intentionally misrepresents, fraudulently conceal, or even negligently conceal something unrelated to the failure of inspection, even the "as is" clause might not protect the seller under common law fraud or misrepresentation case. Case in point hiding a underground oil tank on the property could be unwise.    We find many oil tanks on as is sales, even on these sales when the home was flipped, and the flipper was the as is buyer.  Oil Tank Sweeps

Real Estate Disclosure has progressed over the years and many sellers wanting a fast a sale as possible will have their own home inspection performed prior to listing the home for sale.    This allows the seller to contemplate what issues are present and get estimates to undertake these repairs and disclosing what they did and did not do.    These proactive sellers realize they are selling a used home so wear and tear is expected.   In our experience when we deal with buyers who have had sellers do a pre-sale inspection and repair both sides appear to be more at ease, simple due to the fact that both parties want as much transparency as possible.

*Legal representation in any transaction is always prudent no matter if you are selling or buying.

Why are black mold and unicorns similar? 

Both black mold and unicorns are mythical and do not exist in the real world.  Wait we are saying something that goes against what most people think they know.   There is no mold called black mold.

Case in point, there are ZERO molds named after colors and in fact, most molds have names that are difficult to pronounce.   The list below compromises a wide variety of molds and you will note that black mold did not make the list.  This mold list also demonstrates how easy it would be to mispronounce a mold by name.  In fairness, it would be much easier if molds were named after colors.

Acremonium, Alternaria, Amerospores, Amphobotrys, Annellophora/Taeniolella rudis, Aphanocladium, Arthrinium, Arthrobotrys, Arthrospore formers, Ascospores, Ascotricha, Aspergillus, Aureobasidium, Bactrodesmium, Basidiospores, Beauveria, Beltrania, Bipolaris, Blastobotrys, Botryodiplodia theobromae, Botryomyces, Botrytis, Calcarisporium, Cephaloascus, Ceratocystis/Ophiostoma group, Cercospora, Chaetomium, Choanephora, Chromelosporium, Chrysonilia, Chrysosporium, Circinella, Cladosporium, Coelomycetes, Cunninghamella, Curvularia, Dactylaria, Dicyma,  Doratomyces, Drechslera, Bipolaris, and Exserohilum group, Emericella, Emericellopsis, Engyodontium, Epicoccum, Erysiphe, Oidium, Eurotium, Exserohilum, Fusariella, Fusarium, Geomyces, Geotrichum, Gliocladium, Gliomastix, Gonatobotrys, Gonatobotryum, Graphium, Helminthosporium, Hyalodendron, Lasiodiplodia theobromae, Leptosphaeria, Memnoniella, Microascus, Microstroma, Monilia, Mortierella, Mucor, Mycotypha, Myrothecium, Myxomycetes, Neosartorya, Nigrospora, Nodulisporium, Non-Sporulating, Ochroconis, Oedocephalum, Oidiodendron, Oidium, Paecilomyces, Penicillium, Periconia, Peronospora,Peziza , Phialocephala, Phialophora, Phoma Pithomyces, Polythrincium, Poria incrassata, Pycnidial formers, Pyrenochaeta, Rhinocladiella, Rhizopus, Rusts, Sartorya, Scedosporium, Schizophyllum commune, Scolecobasidium, Scopulariopsis, Sepedonium, Septonema, Serpula lacrimans, Smuts, Sordaria, Spadicoides, Spegazzinia, Spiniger state of Heterobasidion species, Sporobolomyces sp., Sporormiella, Sporothrix, Sporotrichum, Stachybotrys, Stemphylium, Stephanosporium, Syncephalastrum racemosum, Taeniolella, Tetraploa, Thysanophora, Torula, Trichocladium, Trichoderma, Trichosporon, Trichothecium, Ulocladium, Ustilago, Verticillium, Wallemia sebi, Zygomycetes, Zygosporium.

Where did black mold come from?  Black mold is usually connected to several residential sites in the 1990s where long-term water issues in these homes created mold growth that was not detected by the home's occupants.  The occupants got sick but did not know why.  Consistent water issues is key in these cases as all mold is a byproduct of water and moisture, albite typically intermittent water fueled the mold growth.  Constant water allows certain molds to grow, think a wet sticky spore that is highly likely to affect human health.  The owners of these homes eventually found mold, and had issues trying to get insurance companies to pay for mold, and the news media got involved.  In all these cases the color of mold that most stood out was black and the media grabbed onto this, and thus BLACK MOLD was born, so was the phrase Mold is Gold.

Want Expert Mold Advice

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Now there is another source of the term black mold, which is the mold, Stachybotrys chartarum, which uniformed people refer to as the black mold, I say uninformed as this mold is actually blackish green in color.  But let's be fair if someone says you have GREEN Mold you think moss or growth outside home spots or blemishes?   So green mold is not as scary as when someone says you have black mold.  Heck if you have black mold run, get it cleaned up. Black mold is really a sales tactic to scare people.  By the way, Stachybotrys chartarum was a type of mold found in the previously referenced 1990s homes that made the news.    So black mold was grabbed by the media, not a scientist, microbiologist, government agency, or other respected unbiased source but rather the media and used by the media to sensationalize a topic.

Don't buy the black mold hype.

Go to your doctor and no matter how healthy you look, they take tests. Go to the dentist, and you get x-rays.  Regarding environmental issues again you need to test to verify nothing is present.  If you do not test you have a 100% chance of not finding anything.

Environmental Due Diligence is meant to protect a purchaser, commercial due diligence starts with a Phase I and can lead to a Phase II (testing), which while buyers are aware a Phase II is a possibility, it can also find a problem, so why do a Phase II if finding something is not 100% certain?

The map below which is from the 1940's shows an auto sales storefront in a downtown area.  It lists a 550 Gallon Gasoline UST in front of the building.  Today there are retail stores with a coffee lunch spot.  Really zero current evidence of anything automotive or gas tank related.    So, say you want to buy the property.  Do you assume the gas tank is not there anymore?  No, you scan the area by completing a GPR Survey to make sure it's gone and if it's still there you have owner remove the tank.  

How about below, a then and now photo?   Are the tanks still there?  Do you think if the gas tanks leaked, and you owned the property you would be responsible?

What if you find that the tank is gone, well you now take soil samples to make sure there is no residual contamination.   And yes if contamination is found, the property owner owns the problem.

People suspect a building component contains asbestos based on appearance and age of building, but you do not know 100% unless you test.  When you are doing a risk assessment or any other form of environmental due diligence, you would assume the component contains asbestos until proven otherwise.  The same goes for PCB's in an electrical transformer.  Assume it contains PCBs until it is labeled otherwise.   So, while a property owner wants to believe these is no contamination, a buyer can't rely on that belief.  Hence the need for a Phase I and sometimes a Phase II which includes testing.

A case in point an older manufacturing plant (40 years) had a large outdoor compressor.   The compressor at time of sale was only 5 years old, nice and new.   But as an environmental consultant we ask what about the old compressor.  The issue with compressors is they can spit oil and older compressors were known for this.  A REC in the Phase I would be to do a Phase II with soil testing around the 4 sides of the new compressor to look for residual oil from the old compressor.    Yep that is how it works.

We had a group looking to buy a large corner property that had commercial operations in  1930's that could contaminate the property.  The buyers were excited to buy the property.  From decades of experience, we recommended testing prior to purchase.  Their response is below

Thank you for submitting a proposal for our project. As you may know, your company is one of only a few that recommend taking soil samples for analysis.   Obviously, once the analysis is completed, the results would need to be disclosed. Shouldn’t a property owner be concerned that these soil samples might uncover a problem that would need to be addressed further?

Our answer is yes if you find contamination it is reportable and the responsibility of the current owner to pay for.   So there are reasons why a property owner may not want to have a buyer do testing.

If you are buying or selling real estate you need an experienced environmental consultant 0n your side, call the experts

Questions?  Call the experts 888-301-1050

New Jersey Lead Based Paint Hazard Law, aka New Jersey’s Lead Safe Certification.

Bill (S1147) which lead to P.L.2021, c.182 is a law concerning certain lead-based paint hazards in residential rental property.  This legislation takes aim at lead paint and dust, the most common sources of lead exposure in a residence, by creating a new requirement that any rental property in New Jersey built before 1978 be inspected for lead. This closed a loophole in New Jersey's lead testing regulations, which allowed single-family and two-family rental units to go without inspection.   

Many people are referring to this law as , New Jersey’s Lead Safe Certification.

How does New Jerseys new lead law affect property owners?

In short if you have a rental property (built prior to 1978) that has not undergone lead evaluation, such as receiving a lead free (no lead)  certification you have to have a lead inspection within 2 years of July 22, 2022 (when the law came into effect).   The lead-paint inspections are Visual with dust wipe sampling in certain municipalities where children have been found to have an elevated blood level.    The type of lead inspection is based on the lead blood level of children in the municipality and that information can be found by clicking on the following link Lead Inspection Type by Municipality. 

Some properties get a pass such as owner occupied and units that are seasonal such as units rented for under 6 months., VRBO rentals are also exempt.  

Questions?   Free Consultation

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Are lead paint inspections perpetual or one & done?

Lead is eternal under the law, after your initial inspection, you must reinspect every three years going forward but this is tied to having a current lead safe certificate (lead safe is good for 2 years) and tenant turnover.   Stay with me here.  Say you inspect and get lead safe, well that certification is good for 2 years and you technically do not need to reinspect for 3 years.  BUT if your tenant leaves at say 2 years 1 month, your lead safe certificate has expired and instead of waiting three years you have to reinspect because you have tenant turnover.  

A flaw of implementation of the law is it is presumed that your property has lead paint if built before 1978 which is when the CPSC banned lead paint, but in New Jersey it was banned in 1971 AND usage was on the decline starting in 1960.  So many properties built between 1960 and 1978 likely do not have lead paint, of course you could buy lead based paint out of state at Rickels or Hechingers or Mr. Good Buys.

Pro Tip:  The law assumes you have lead paint.

If you have not tested for lead based paint and the property is pre-1978 original construction, the law states you must assume it is lead-based paint, 

So, what does this Lead Safe Certification law require of a property owner?

If you rent pre-1978 property that does not qualify for one of the exemptions, beginning July 22, 2022, you will be required to have a Visual Lead-Paint Inspection or visual and wipe sampling.  You hope to pass the inspection and obtain a Lead Safe Certification, (which is only good for two years). 

This inspection, (visual and/or dust wipe) can only be done by

 1) Municipal local agency inspection program,  Least Likely

2) a NJ DCA certified Lead Evaluation contractor hired by the municipality Not  Likely 

OR  

3) the property owner can hire directly a NJ DCA Certified Lead Evaluation contractor to provide the required inspection services. Most Likely 

All of whom will assess a fee for the inspection services.   

Oh and the municipality is required to obtain a fee of $20 per unit inspected which goes into a fund for lead education and remediation.

If no lead-based paint hazards are found during the inspection, the local agency or the DCA certified lead evaluation contractor shall certify the dwelling unit as lead-safe on a form prescribed by the department of Community Affairs.  The form is provided to the owner, municipality and the DCA.

What if a Lead Hazard is Found?

If Lead based paint hazards are found:

1      The owner has to address it and get a reinspection within 60 days.

2.    Commissioner of Community Affairs must be notified.

3.    Section 8 of the, “Lead Hazard control Assistance Act” if Lead Hazards are identified in a two or three family pre-1978 rental property, the law requires the remaining units in the property also be visually and/or dust wipe sampled.

The Rub

If you find a lead paint hazard, well you have to more intensively inspect the other units if they exist

Additionally, if the lead evaluation entity (municipal or private) finds that a lead-based paint hazard exists in a dwelling unit upon conducting the inspection pursuant to this law, the lead evaluation contractor or permanent local agency shall notify the Commissioner of Community Affairs. Upon reviewing the finding in accordance with Section 8 of the, “Lead Hazard control Assistance Act” if Lead Hazards are identified in a two or three family pre-1978 rental property, the law requires the remaining units in the property also be visually and/or dust wipe sampled.

How you address lead paint is either interim controls or abatement.

The law further requires that “upon completion of correcting any Lead-Based paint hazard identified during the visual Lead Safe Certification Inspection”, the Lead evaluation contractor or permanent local agency shall conduct a follow up inspection (visual &/or dust wipes) of the unit to certify that the hazard no longer exists.   Additional fees apply.

To utilize NJ resources most appropriately, the law has implemented a two-tier public protection inspection requirement.  If your rental property is located in a municipality where more than 3% of the children 6 years of age and younger in the community have a blood lead level of equal to or greater than 5ug/dl (CDC old Reference Value) the local agency or NJ DCA Certified Lead Evaluation Contractor shall inspect for lead based paint hazards through dust wipe sampling in addition to a visual inspection for deteriorated painted surfaces.  

Owners will be required to provide copies of all Lead Safe Certifications (per unit) and leases to the DCA inspector during their 5-year multiple dwelling inspection.  Property owners will be required to provide copies of a current or newly issued Lead Safe Certificate to new residents specific for the unit they will be renting as part of the lease documents. If a resident resides within the unit during the Re-Lead Safe Certification renewal cycle (3 year) the resident must sign a copy of the Lead Safe Certification and such documentation must be maintained  

Failure to comply with NJ Lead Safe Certification requirements can incur fines of up to $1000 per unit per week.

What to do to get ready for compliance?  First do you meet one of the following Exemptions? (1) the property has been certified to be free of lead-based paint, – (2) the property was originally constructed during or after 1978 , – (3) the rental unit is in a multiple dwelling that has been registered with the DCA as a multiple dwelling for at least 10 years, either under the current or a previous owner, and has no outstanding lead violations from the most recent cyclical inspection performed on the multiple dwelling under the “Hotel and Multiple Dwelling Law,” – (4) is a single-family or two-family seasonal rental dwelling which is rented for less than 6 months duration each year by tenants that do not have consecutive lease renewals; or  -(5) has a valid lead-safe certification issued in accordance with this section.

Confused yet?

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There are inherent risks in life and in particular when you purchase something.   Warranties on products including cars are meant to balance the risk.  But when you buy a commercial property, you are buying more than the land and any improvements, you are buying any environmental issues past or present unless specified otherwise.  (There are sites that have government permitted contamination, that is a restriction on the property for sure. but it is s defined environmental liability). 

I am referring to the purchase of a property that has undiscovered environmental issues.  How you avoid buying a contaminated property is by performing Due Diligence such as a Phase I Environmental Site Assessment.  More about Phase I ESA Click Here.

As this article states when should you be concerned about environmental issues on a commercial property?

The safe answer is on every commercial property that you have not completed your own due diligence.

Yes, that downtown property you want to buy may have been an auto garage, dry cleaner, part of a rail spur, I've seen tanneries (Tanneries are where animal hides are tanned, and the wastes generated from tanneries are considered a pollutant to the environment and has potential to pollute both soil and water because of the use toxic chemical constituents in the tanning process). 

The rub of downtown areas is they were the center of commerce, which can cause pollution long before environmental regulations became the norm.   Buying close to a rail line?  Well rail roads caused contamination and land was often built up with historic fill.  (Historic Fill material was commonly used to raise the topographic elevation of properties.    The fill material is composed of non-indigenous material… which may have been contaminated prior to emplacement and is in no way connected with the operations at the location of emplacement and which includes, without limitation, construction debris, dredge spoils, incinerator residue, demolition debris, fly ash, or non-hazardous solid waste). Because of the nature of its composition, historic fill material is a widespread concern for many property owners and potential property purchasers.    In short, the property can have at the time of placement legal contamination, which today is no longer legal.

Yes, none of this is fair.  There are other warning signs when you buy a commercial property even when you perform due diligence, I will run down a couple of items buyers should be concerned about.

1.  A Phase I includes interview and questionnaire with the owner who is typically the most knowledgeable party.    When this can't be accomplished you have important data gaps, which may be intentional on part of the seller.

2.   The owner has no prior environmental reports, meaning they didn't do their own Phase I or will not supply their report.  Want to know why an owner may not want to be interviewed for a Phase I, their lack of due diligence can be a driver.  

The historical map below shows auto sales at a downtown property, and it also lists 550 gallon gasoline tank in the street.  That tank and contamination belongs to the property and will only be known if you do due diligence. 

3.  The Phase I leads to a Phase II, which is testing and can absolutely open up a can of proverbial worms.  If you test you have a chance of finding a problem.  No testing?  Well 100% chance of finding nothing.  But the rub is when the owner denies or limits testing.  For example, we had a site where both soil and groundwater testing were warranted.  The owner did not want groundwater tested because the property had municipal water.  Groundwater is typically the 1st water bearing zone on a property, a good average is 16' to 20' deep.  You are not drinking this water ever, but if this water is contaminated, well it belongs to the owner.   My point being sellers will come up with some nugget of reason why we do not need to test, which is irrelevant in the context of environmental due diligence.

4.   Owner provides reason why due diligence is irrelevant (remember buyer pays for the work not the seller).  Case in point client buying a former appliance store, which was a former laundromat.   Seller wanted no testing because refrigerators and microwaves are not an issue and a laundromat, well that's just dirty cloths.  Fast forward we test groundwater water and find dry cleaning solvents.  Conclusion, the laundromat did dry cleaning.  Saved our client $165,000.

Commercial Property Purchase Pro Tips

Start your due diligence and do not consider Due Diligence to be a hand stamp, because if you find an issue it will take time address it.

Understand that your proposed settlement date was likely set PRIOR to performing Due Diligence.  When Due Diligence finds an issue settlement could be pushed back weeks, months even years. 

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NJDEP No Further Action Letter or "NFA"

An NFA is a document, typically one page, that is issued by the New Jersey Department of Environmental Protection’s (NJDEP’s) Heating Oil Tank (HOTs) program to close out the contamination issue of a heating oil tank discharge.

Basically, the No Further Action Letter is an environmental release of “No Further Action” from the New Jersey Department of Environmental Protection (NJDEP) and the culmination of a property's environmental remediation, which can include tank removal, remediation, and testing.

Only residential sites receive an NFA.

Can an NFA be rescinded?

Unfortunately, an NFA can be rescinded or withdrawn if it is found that the subject site that received the NFA has contamination that is above applicable NJDEP standards for either soil or groundwater. Rescinding an NFA is rare but does happen.

Will every residential oil tank receive an NFA letter?

To be applicable for an NFA letter you would need a site with a tank that leaks.   You would then need to document that the leak as it occurred is to the extent (minimal) that petroleum levels are below NJDEP standards or that remediation was performed that reduced petroleum levels to be within NJDEP acceptable standards.  If your oil tank does not leak, you will not obtain an NFA. If your oil tank does not leak, the NJDEP and the EPA are not contacted.  

How do you obtain an NJDEP NFA?

You must employ an NJDEP-licensed firm and an individual for the work and submit documents in the form of a report with applicable NJDEP forms to NJDEP with a $400.00 review fee. The NJDEP will review these documents, typically within 30 days, and issue an NFA if applicable. If the NJDEP reviews submitted documents and find the site is not in compliance, the NJDEP will not issue an NFA and will list what is lacking and needs to be performed to obtain the NFA

Can a site receive two NFA letters?

If the site has two leaking oil tanks, of which some properties had 2 oil tanks, then yes two NFA’s can be obtained.

Can a property be sold without an NFA letter?

There is no law that prevents the sale of a residential oil-contaminated site. Yes, a property can be sold without an NFA letter, and a contaminated property can be sold, it is finding a buyer that would be difficult.  That buyer may not be able to get a mortgage or home insurance due to the contamination. 

How can I obtain a copy of an NFA for a site where an NFA was issued?

First, if an NFA is issued, the property owner should hold a copy of the letter and the NFA should be issued to subsequent property owners during the sale of the property.

NFAs are now electronic.  

An NFA is a matter of public record so a copy can be obtained via an OPRA.  An NFA is issued to the responsible party (RP), typically the property owner, a copy to the local Board of Health and to the municipal clerk of the city, township, or municipality where the property is located.  The NJDEP also has a copy.

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Environmental Assessments, Environmental Audits, and Environmental Due Diligence are performed to identify any environmental concerns that need to be addressed before a property settlement occurs.   Environmental due diligence is the assessment of known and potential environmental liabilities, unknown or not disclosed, associated with real estate.   It is an integral part of any commercial real estate transaction. The environmental audit is meant to protect all parties involved in the transaction, including the lender, but contamination devalues the asset. Without an environmental assessment, the buyer buys contamination and owns the problem even if you know it is present or not. Sellers do not want to enter into litigation or any dispute after a sale occurs due to contamination being found.

Here are some of the most frequently asked questions concerning environmental site assessments from 30 years of Due Diligence experience:

• Why do I need to do environmental due diligence?
• When is environmental due diligence required?
• Who pays for the environmental audit?
• What is involved in the environmental audit?
• Can we test immediately?
• How long does an environmental assessment take?
• How much will it cost?
• If I am paying cash, do I need an environmental audit?

 Those are very common questions and we even get them from groups that already have substantial real estate holdings.   The answer to each question depends on the property.   Some sites require more due diligence than others, industrial sites would demand more extensive evaluation while buying a parcel of land from a closed church would require less. I do not reference a downtown storefront as getting a hall pass on due diligence as downtowns were the epicenter of commerce and there are plenty of contaminated sites along the main streets USA.

 Why do I need to do environmental due diligence?

Before environmental regulations, pollution was legal so to speak. The federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), aka “Superfund.” Gives the Environmental Protection Agency (EPA) EPA which was created on December 2, 1970, by President Nixon the authority to pursue a private party or current or past owners or operators of contaminated property for costs associated with environmental cleanup.  CERCLA holds owners responsible for cleaning up contamination on their property, even if they did not cause or contribute to the problem. An important feature is that CERCLA liability is joint and several meaning any liable party may be required to clean up all the contamination, even though that party only caused a small amount of the overall contamination. It is not 100% fair, but it is meant to catch up on past pollution that occurred prior to the regulation. If polluters knew they were polluting is open to debate.

When is environmental due diligence required?

After reading how liability is assigned to what our clients would call an innocent landowner, every property could benefit from an environmental audit prior to sale.

Who pays for the environmental audit?

The party that receives the most protection pays for the environmental study, which is typically the purchaser. Not many banks contract for environmental audits, Phase I ESA, on behalf of the borrower, and this cost is passed through to the borrower.

There are cases where the Phase I environmental Audit is split between buyers and sellers.

There are also cases where an owner contracts for the environmental audit to address any environmental issues prior to listing the property for sale, these are not common, but it is safe to say when this occurs the property sells faster.

 What is involved in the environmental audit?

There are varying types of environmental audits, the most common is a Phase I Environmental Site Assessment (ESA) which is formatted by ASTM to standardize the audit.

A Phase I ESA is an investigation into past and current ownership and uses of the property to assess the possible existence of contamination.  Hundreds of pages of data are collected for each site, each site is physically evaluated, and knowledgeable parties are interviewed, that is the nutshell explanation. A large office building today could have been a lumber, coal, and fuel yard (true site) in 1910.  

In layman’s terms, the purpose of any environmental audit is to identify potential environmental conditions that may affect the property or trigger liability to a property owner.

Can we test immediately?

All environmental audits start with research and no testing is performed as you first need to evaluate the site to determine if it is a target-rich environment for testing. The referenced coal fuel yard required testing where materials were stored and testing also found buried petroleum tanks in the parking lot.

If a site is deemed without any issue, you never proceed with any testing. Conversely, a site where historic suspect contamination may be present would warrant testing. A small apartment building on a large lot found operation in the 1890s that left contamination on the site the owner had to address to sell the property to a developer. and helps to determine whether further due diligence is needed and whether a Phase II ESA must be conducted.

How long does an environmental assessment take?

On a basic level, all environmental audits require acquiring historical data for review.   The thoroughness of the acquisition of this historical data adds time and if a site visit is part of the environmental audit that must be arranged.   Allocate 3 weeks for an environmental audit to provide a written report which may say no testing is required or we found multiple areas on the property that require testing. Add testing to the environmental evaluation and you can be months from the finish line.

Be aware that if you get an environmental report within a few days it will be far less thorough than a report taking weeks, that is a fact.  There are many reports we review that was issued and were incomplete due to the consultant waiting on historical data to be obtained. These reports are incomplete and now require a secondary report that may contain data that conflicts with the initial incomplete report. Follow me on this you can’t expect fast and thorough on all sites.

  How much will an environmental audit cost?

The baseline environmental audit is a Phase I ESA that runs between $2,200 to $3,000 depending on the complexity of the site. Be aware as environmental consultants, we do a cursory evaluation on prospective sites to see if the site is going to be a time suck (aka $3,000.00 range) or closer to $2,200 for the average site. Also, know that the cost of acquiring data is set for a single address site, larger sites, and multiple addresses incur higher costs for data acquisition., so you can expect larger parcels to be in between these two costs due to time and data acquisition expense.

 If I am paying cash, do I need an environmental audit?

Generally speaking, performing an environmental audit such as Phase I is important for every commercial property purchase. A Phase I assessment is performed by an environmental professional that analyzes the likelihood of contamination. If you do not need a mortgage and are an environmental professional perhaps you are qualified to not do the environmental.

Know that lenders require an assessment to protect their investment, not to protect you.

Buyer assumes financial risk by not conducting an ESA on a property before settlement. If the environmental audit cost and findings are not within the budget of the purchase of the property, the deal may not be viable.