Buying a Commercial Property in New Jersey and Environmental Concerns

Posted by ANGELA RICH HARTMANN | Apr 13, 2021

New Jersey is different from other states in that it requires a commercial property purchaser to first conduct a Preliminary Assessment to be protected under the New Jersey Spill Compensation and Control Act (Spill Act). In recent cases, the court discovered that most purchasers do not perform adequate environmental due diligence and are thus not protected by the Spill Act.

If you are seeking to purchase a piece of commercial property in New Jersey, a skilled real estate attorney will be able to help you navigate the complexities of these regulations. You don't want to end up in a situation where you think you have taken the necessary steps to protect your purchase, then seek the protection and find out you are unprotected because you didn't take the appropriate steps before purchase to qualify for protection.

Federal vs. State Regulations

Commercial property purchases are subject to several federal regulations, including performing a Phase I Environmental Assessment. In New Jersey, you must fulfill both the Phase I ESA and a Preliminary Assessment to be protected by the Spill Act.

A Phase I ESA identifies the:

  • Recognized Environmental Conditions
  • Historical Recognized Environmental Conditions
  • Controlled Recognized Environmental Conditions

Alternatively, a Preliminary Assessment requires the assessor to review the property's:

  • Tax records
  • Deeds
  • Historical chain of title
  • Business directories

They also need to determine if there were other remedial actions on the property, how they were protected, and if there have been any known changes in site conditions since the last Preliminary Assessment of the property.

In New Jersey, the performance of the Preliminary Assessment is the lowest level of inquiry a purchaser must make of the property to be protected, but for further Federal protection, a Phase I ESA should also be performed prior to purchase.

How Hartmann Law Can Help

Buying commercial property in New Jersey can be a confusing experience even if you're a seasoned commercial real estate purchaser. At Hartmann Law, we have over twenty years of experience in real estate law. We understand the intricacies of commercial real estate law and can help you perform proper environmental due diligence, so you are protected at both the federal and state level. Contact us today to schedule a consultation. We're here to help.

About the Author


Angela Rich Hartmann is a New Jersey attorney serving clients in the areas of estate, business, and real estate law.