USA - NEW JERSEY Law and Practice Contributed by: Steven Fleissig, David Freylikhman, Cory Mitchell Gray and David Jensen, Greenberg Traurig LLP
vival periods vary, and are a typical negotiation point in most deals. If such representations do not survive closing, a merger clause will merge any and all representations made into the deed. To backstop the representations and warranties post-closing, sellers will occasionally agree to either a post-closing holdback escrow or a guar - anty from a credit-worthy guarantor. In commercial transactions, a purchase and sale agreement typically includes, at a minimum, the following representations and warranties: • organisation and formation of the seller along with full right, authority, and capacity to exe - cute the agreement and to perform its obliga - tions 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 condemnation proceedings against the property; • no third parties have any options to purchase the property or other possessory rights which may frustrate the sale; • no known environmental defects with the real property 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 cer - tificates necessary for legal use or occupancy of the real property; and • no pending or threatened changes in the zon - ing 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 per - sons 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. There are no additional regulations for non-US purchasers imposed by the state of New Jersey. Foreign investors must understand whether they will be subject to other federal or state regulatory laws, including securities regulations, environ - mental laws, foreign corrupt practices statutes, and laws requiring the reporting of the acquisi - tion of ownership of US real estate. If foreign investors will have a controlling interest in the owner, the transaction may be reviewed by the federal government. The Foreign Investment in Real Property Tax Act can subject foreign investors to federal income tax liability and the withholding of proceeds from a sale or transfer. While recent changes to CFIUS have resulted in modifications to process and breadth, in practice it has not had a major impact. 2.7 Soil Pollution or Environmental Contamination New Jersey is known for having among the strictest environmental statutes in the United States. Sellers will typically seek: • a disclaimer of all liability for environmental conditions and a full release by purchaser upon closing; • a prohibition on purchasers’ use of an LSRP for due diligence; and • confidentiality provisions which will com - pel the purchaser to keep all results of its
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