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The State Has Pushed Snooze for the Last Time and It's Time for Developers to Go to Work!

April 21, 2016

CSG Real Estate Client Alert

All signs indicate that the State Legislature will take no further action to extend the Permit Extension Act (“PEA”), which tolled governmental permits during the economic downturn that decimated the real estate market.

First enacted in 2008, and extended several times, the PEA was designed to avoid the wholesale abandonment of development projects that could no longer be financed during the recession. Through its enactment, the approval period on most permits and approvals issued or in effect between January 1, 2007 and December 31, 2015 (“Extension Period”) was automatically suspended. Importantly, however, the PEA will not extend a permit or approval more than six months beyond the Extension Period where it was otherwise due to expire within the Extension Period.

Without further action by the State, that means some may already be late for work and have expired permits - for the majority of holders of existing permits the alarm will ring on June 30, 2016.

Eligible permits and approvals that were set to expire between January 1, 2007 and June 30, 2007 were extended until the corresponding date in 2016. For example, if an eligible permit according to the PEA expired on May 1, 2007, the permit now expires on May 1, 2016. Eligible permits and approvals that expired or were scheduled to expire between July 1, 2007 and June 29, 2016 are extended until June 30, 2016. Any permit or approval that exists by its own terms and is not extended or does not use the benefit of the PEA, will not be shortened and will continue to enjoy its full time period, even if that time period extends beyond June 30, 2016.

Be prepared for when the alarm rings and evaluate your permits and approvals today. There are exceptions to the above rule and legal mechanisms may be available to further extend vested development rights outside of the PEA that should be explored.

There’s More Work to Do… New Jersey Recently Revised It’s Building Codes. How Does It Affect You?

Also of significance to projects under construction, or with recently issued building permits, is that on March 21, 2016 newly adopted building code regulations became effective. Highlights of the code changes include:

  • Building entrance accessibility
  • Wind design criteria; and
  • Sprinkler requirements

If, however, a completed permit application was filed prior to the effective date and construction commences within one (1) year after the issuance of the permit and progress is made every six (6) months thereafter, it may be grandfathered under the prior building code regulations. Accordingly, it is imperative to move projects at the necessary cadence.

If you have any questions concerning the PEA or how a project may be affected by the recent building code changes, please contact your CSG attorney or the authors listed below.

Stephen A. Kisker
Member, Real Estate, Development & Land Use | skisker@csglaw.com | (973) 530-2074

Lisa A. John-Basta
Counsel, Real Estate, Development & Land Use | ljohn-basta@csglaw.com | (973) 530-2083

Chad Yablonsky
Associate, Real Estate, Development & Land Use | cyablonsky@csglaw.com | (973) 530-2103