Tolling of Approvals Under New Jersey’s Permit Extension Act: Will The End Of The Year Be The End Of The Line? Approved Projects Could Be At Risk

New Jersey’s Permit Extension Act (“PEA”) was initially enacted in 2008 — in response to “the crisis in the real estate finance sector of the economy” — for the purpose of tolling, through the end of 2012, expiration of various approvals necessary for development. It was later extended, in 2012, due to the then “current national recession,” to extend the tolling of the expiration of those approvals until December 31, 2014. Unless the Legislature approves a further extension, the PEA will sunset at the end of this year, and that could pose a problem for projects which have not yet started construction, because their approvals may expire.

The PEA provides for tolling of any “approval,” as defined in the statute, which is or was in existence during the extension period (January 1, 2007 through December 31, 2014). Although there are important exceptions, most subdivision, site plan and variance approvals granted pursuant to the Municipal Land Use Law are encompassed within covered “approvals,” as are many approvals granted by the New Jersey Department of Environmental Protection (NJDEP), New Jersey Meadowlands Commission (NJMC), Delaware and Raritan Canal Commission, New Jersey Pinelands Commission, and various other agencies.

The PEA further provides that “the running of the period of approval is automatically suspended for the extension period” (i.e., through December 31, 2014), but tolling “shall not extend the government approval for more than six months beyond the conclusion of the extension period” (i.e., through June 30, 2015). The PEA also shall not “shorten the duration that any approval would have had in the absence of [the PEA].” Thus, any included “approval” which was granted or which was set to expire after January 1, 2007, was extended by the PEA through the end of this year.

With the extension period about to conclude, each approval must be individually examined and evaluated to determine:

  • its original expiration date;
  • its new expiration date as a result of the tolling afforded by the PEA; and
  • whether any other extensions are available pursuant to the regulatory authorization under which it was granted.

Some approvals will expire as of December 31, 2014, while others may be viable through June 30, 2015 or to some point in between.

Legislation is pending which would further extend the tolling provided by the PEA, based on the “most recent national recession,” by redefining the “extension period” to conclude on December 31, 2016, and hence toll the running of the period of approval through that date. As is now the case, the legislation provides that the PEA could not extend an approval for more than six months beyond the conclusion of the extension period, i.e., through June 30, 2017, and could not shorten the duration that any approval would have had absent the PEA. The legislation, A-3815 and S-2551, has not been voted out of committee as of this writing.

Given the uncertainties of any further extensions, those with existing approvals tolled by the PEA would be well advised to evaluate them now, determine their present status, and investigate whether other methods of extension are available, or whether new applications are required. This could be particularly important in situations where changes have occurred in applicable regulations, since any re-applications to obtain new approvals to replace those which have expired must comply with the regulations presently in effect. Please contact an attorney in the Gibbons Real Property Department if you have a project for which you would like to perform this analysis.

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