Permit Extension Act of 2008

One need not be formally trained in economics to recognize the signs of a significant downturn in the health of the American economy. Sub-prime mortgages have precipitated a “correction” of fairly major proportions in the real estate market. Significant negative economic factors are challenging the banking, real estate and construction sectors throughout New Jersey. Believing that “…the construction industry and related trades are sustaining severe economic losses, and the lapse of government development approvals would… exacerbate those losses”, the New Jersey legislature attempted to offer some relief through the passage of the Permit Extension Act of 2008. The bill was executed by Governor Corzine on September 6, 2008. The obvious thrust of this new legislation is to break the downward cycle by preventing the abandonmentof approvals.

Environmental groups, including the NJDEP, have been vocal in their protests over the passage of this legislation. They cite dire consequences for the environment by allowing expired approvals to be brought back to life, a provision of the Act environmental groups have dubbed the “Dracula” clause. Noting that conditions surrounding zoning and environmental regulations are constantly changing, environmentalists articulate the ability to control such conditions will be severely compromised by the passage of this legislation. It is anticipated that legal action will be filed by one or more environmental organizations to attempt to set aside this legislation.

The permit extension period will run from January 1, 2007 through July 1, 2010. Expiration dates will be “suspended.” All such suspended permits cannot be extended later then January 1, 2011.

Not surprisingly, there are limitations. Specifically, the Act excludes permits issued by a federal agency or any permit issued in an environmentally sensitive area as well as permits issued under the Flood Area Hazard Control Act. Additionally, certain permits issued by the NJDOT and the NJDEP under the Coastal Area Facility Review Act will also be excluded. But overall, this is a welcome bit of relief in an otherwise trying time.

James E. Jaworski is a Senior Partner of WJ&L. He also heads up our Real Estate Department and actively practices in the Land Use and Development areas.

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