April 2, 2011 | Comments Off
Posted by Marc Policastro
The Site Remediation Reform Act (SRRA) confirmed what I have been counseling clients for years. In general, if you are a “responsible party” (RP) for remediation, there are just too many ways the State may enforce your obligation to investigate and remediate a release of hazardous substances. Now, under the LSRP program there is simply no doubt. The new law creates a clear “duty to remediate” which changes the playing field.
In the pre-LSRP world, an RP under ISRA, the Spill Act, or the Underground Storage Tank Act, could opt to “voluntarily cleanup” a site by entering into a Memorandum of Agreement (MOA) under the Voluntary Cleanup Program. Under the MOA, there were no mandatory time frames for investigating, reporting or remediating. Now, under the new program, the voluntary MOA route is no longer an option. The implications are clear from a transactional lawyer’s perspective. Previously, developers looking to “tie-up” properties prior to obtaining full approvals, or prior to completing due diligence, could enter into the MOA-voluntary cleanup program, and set their own course and time frames for remediation. Careful maneuvering and planning is now required prior to taking title to property affected by contamination. Once title passes, the voluntary “wait and see” game is no longer an option, unless the owner contracts with its seller for shared, or some type of shifting of responsibility. Even where contractually there is a sharing or shifting of liability, NJDEP will continue to look to the RP as the primary target on its radar.