NJDEP Posts Guidance for Prospective Purchasers of Contaminated Sites to Obtain Adjustments to Direct Oversight Requirements

On September 9, 2022, the New Jersey Department of Environmental Protection (NJDEP) issued its Pre-Purchase Administrative Consent Order Guidance through the NJDEP’s Contaminated Site Remediation & Redevelopment Program. The guidance document explains how prospective purchasers of contaminated sites subject to Direct Oversight can obtain a Pre-Purchase Administrative Consent Order (ACO), allowing for adjustments to Direct Oversight requirements.

Under the Site Remediation Reform Act, if the person responsible for conducting remediation of a contaminated site fails to complete the investigation and remediation within mandatory timeframes, the NJDEP automatically places the site into Direct Oversight. The Direct Oversight requirements are a more prescriptive remediation process for the person responsible for conducting remediation. Some of the Direct Oversight requirements include: NJDEP selection of the remedial action for the site; NJDEP approval of each document submitted by a licensed site remediation professional; establishment of a remediation funding source in the amount needed to complete remediation; performance of a remedial action feasibility study for NJDEP approval; and compliance with an NJDEP-approved public participation plan.

Once a potential buyer of a site closes on a contaminated property subject to Direct Oversight, the potential buyer becomes a person “in any way responsible” for remediating the site pursuant to the Spill Compensation and Control Act (“Spill Act”). By entering into a Pre-Purchase ACO, a potential buyer who is neither a discharger, responsible party, or in any way related to the responsible party(ies) may be afforded the following adjustments to oversight: new compliance timeframes for the potential buyer to complete the remediation; the remedial action for the site chosen without NJDEP approval; the use of any type of remediation funding source mechanism (except self-guarantee); avoidance of the requirement to prepare and submit to the NJDEP a remedial action feasibility study; and the ability to pay annual remediation fees in lieu of the NJDEP’s oversight costs.

A Pre-Purchase ACO must be fully executed by the potential buyer and NJDEP prior to closing on the property (i.e., prior to becoming a Spill Act responsible party). The NJDEP prefers a minimum two-month lead time to draft and fully execute the Pre-Purchase ACO; however, simple sites may require less time and complex sites may require more time.

In addition to the guidance document, the NJDEP has also posted the Pre-Purchase Administrative Consent Order Form and Instructions. The forms and supporting instructions are available in the forms library.

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