USA – NEW JERSEY Law and Practice Contributed by: David Freylikhman, Cory Mitchell Gray, David Jensen and Jody Saltzman, Greenberg Traurig LLP
deed must be signed, acknowledged and contain an adequate description of the property. Flood Hazard Disclosure The New Jersey Flood Hazard Disclosure Law applies to all real estate transactions, and requires specific disclosures to be made by a seller before a purchaser is obligated under a contract for the purchase of real estate, including whether the property is located in the Federal Emergency Management Agency (FEMA) Special or Moderate Risk Flood Hazard Area. 2.4 Real Estate Due Diligence The due diligence process is complicated, and the level of scrutiny would depend on the facts. Typical - ly, real estate due diligence involves the review and inspection of the following by the purchaser and/or its attorneys of materials that would include: • title reports; • surveys; • rent calculations for compliance with rent regula - tions; • leases and tenant estoppel certificates; • service contracts; • warranties; • property condition reports; • zoning; Sophisticated clients typically handle some of the above diligence activities on their own – specifically, review of rent rolls and rent calculations, operating statements, and service contracts on the property. It is worth noting that the diligence process in New Jersey is not dissimilar from the process in other juris - dictions; however, the environmental diligence is more nuanced as a result of New Jersey’s environmental laws. In this context, it is typical and often advisa - ble for a seller of real estate to impose strict access requirements, especially in reference to Licensed Site Remediation Professionals (LSRPs). 2.5 Typical Representations and Warranties In New Jersey, purchase and sale agreements have representations and warranties of both purchaser and • environmental reports; and • certificates of occupancy.
seller, which are often carefully negotiated. The most common are: • organisation and formation of the seller along with full right, authority and capacity to execute the agreement and to perform its obligations under the purchase and sale contract; • no pending or threatened lawsuits against the seller or otherwise affecting the property; • the seller’s resident or non-resident status; • no pending or threatened eminent domain or con - demnation proceedings against the property; • that no third parties have any options to purchase the property or other possessory rights that may frustrate the sale; • no known environmental defects with the real prop - erty or any actions being taken by any agency with respect to the environmental condition of the real property; • the existence of all licences, permits and certifi - cates necessary for legal use or occupancy of the real property; and • no pending or threatened changes in the zoning classification of the property. 2.6 Important Areas of Law for Investors Foreign investors must register with the New Jersey Department of Treasury as a foreign entity authorised to do business in the State of New Jersey. Foreign investors that are non-US entities or persons should pay attention to the usual issues on a federal level, such as: • international tax considerations; • collateral regulatory burdens; and • the Committee on Foreign Investment in the United States (CFIUS) review. No additional regulations for non-US purchasers are
imposed by the State of New Jersey. 2.7 Soil Pollution or Environmental Contamination
New Jersey is known for having some of the strictest environmental statutes in the United States. Typically, the purchase and sale agreement will allocate respon - sibility for any conditions on the property that were
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