USA – NEW JERSEY Law and Practice Contributed by: David Freylikhman, Cory Mitchell Gray, David Jensen and Jody Saltzman, Greenberg Traurig LLP
signed, acknowledged and contain an adequate description of the property. Flood Hazard Disclosure As to any transactions of real estate in New Jersey after 20 March 2024, the Flood Hazard Disclosure Law shall apply, and names certain required disclosures that must be made before a purchaser is obliged under a contract for the purchase of real estate, including a disclosure as to whether the property is located in the Federal Emergency Management Agency (FEMA) Spe - cial 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. Typically, 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 regulations; • 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 – spe - cifically, 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 • environmental reports; and • certificates of occupancy.
other jurisdictions; however, the environmental diligence is more nuanced as a result of New Jersey’s environmental laws. In this context, it is typical and often advisable for a seller of real estate to impose strict access requirements, especially in reference to LSRPs. 2.5 Typical Representations and Warranties In New Jersey, purchase and sale agreements have representations and warranties of both purchaser and seller, which are often carefully negotiated. The most common are: • 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 that 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.
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