New Jersey

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Contact: Karl Eckhart
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New Jersey Permit Extention Overview

The New Jersey Permit Extension Act (PEA) extends the approval period of certain permits issued by state, county and local government unit.

In April 2020, New Jersey Senate Bill 2346 was introduced in the Senate. The bill would create a new extension period under the “Permit Extension Act of 2008” that covers permits in existence during the period in which the COVID-19 public health emergency or state of emergency is in effect.

The bill is working its way through the New Jersey legislature and we will update the page accordingly.

Background

In New Jersey, it is costly and time-consuming to obtain permits and approvals for commercial and residential projects. The state Legislature found that there exists a national recession that has drastically affected various segments of the New Jersey economy, but none as severely as the state’s banking, real estate and construction sectors. As a result of the economic crisis, real estate developers and redevelopers, including homebuilders and commercial, office and industrial developers, have experienced an industry-wide decline. The New Jersey Permit Extension Act extends the approval period of certain permits issued by state, county and local government units.

Following the national recession, the initial New Jersey Permit Extension Act – NJSA 40:55D-136.1 et. seq. – became law on September 6, 2008 in response to what was designated by the New Jersey Legislature as a ‘statewide recession in order to preserve and extend a wide range of construction approvals first granted on or after January 1, 2007’.

The law ran through December 31, 2012 with a six-month grace period, and in some cases, beyond that for certain approvals. When the Act was close to expiration, it was re-extended through December 31, 2014 with the justification that because the state was part of a larger national recession, developers needed more time to maintain their approvals. Another extension was approved in late 2014 extending the Act for certain approvals and permits through December 31, 2015, again, with a six-month grace period.

In 2016, a one-year extension (A3617/S2390) was approved by Governor Christie for the nine counties most affected by Superstorm Sandy. The law allows the permits that were previously extended by the PEA to remain valid in Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, and Union counties until June 30, 2017. Applicants outside of those nine counties should seek extensions from the municipal Planning Board and Board of Adjustment approvals.

New Jersey Permit Extension Act

There are some specific permits and approvals that are not covered by the PEA, such as permits issued in “environmentally sensitive areas” (as defined in N.J.S.A. 40:55D-136.3), approvals by the New Jersey Department of Transportation (except for those specifically listed), Stream Encroachment Permits (unless commencement of site improvements or structures has begun), and federally-issued permits or approvals. A full list of the exceptions, and the caveats to the exceptions, can be found at N.J.S.A. 40:55D-136.4.

How Tolling Works under the PEA

To understand tolling, think of January 1, 2007 as a legislative stop watch that hit “pause.” On December 31, 2015, the Legislature will hit “start” on the stop watch, and the time remaining on the permit as of January 1, 2007 will start ticking. Therefore, tolled permits do not automatically expire on December 31, 2015.

However, there is a limit to how much time is left on the legislative stop watch. The PEA provides that June 30, 2016 is an automatic expiration date. The Legislature provided for this automatic expiration date, as follows: “For any government approval in existence during the extension period, the running of the period of approval is automatically suspended for the extension period…; however, the tolling provided for herein shall not extend the government approval more than six months beyond the conclusion of the extension period.” N.J.S.A. 40:55D-136.4. In other words, when the Legislature hits “start” on the stop watch on December 31, 2015, there is a six-month limit to how long the clock can run. Thus, any permit that had more than six months left when the PEA went into effect will automatically expire on June 30, 2016, as illustrated in the examples below.

However, the PEA cannot shorten the term of any approval. Id. at 136.4(a). If a permit has an original expiration date after June 30, 2016, it will not automatically expire on that date, and it is wholly outside of the PEA, as illustrated in the examples below.

The specific expiration date of any permit needs to be analyzed on a case-by-case basis. However, generally permits will fall into three categories, and be affected by the PEA as follows:

Category 1: If there were more than 6 months left on the permit on January 1, 2007, the permit will automatically expire on June 30, 2016.

Category 2: If there were less than 6 months left on the permit on January 1, 2007, the permit will expire December 31, 2015 plus the time remaining on the permit.

Category 3: If the original expiration date is after June 30, 2016, the PEA does not apply; no tolling is invoked, and the legislative stop watch is not involved. The original expiration date remains the final expiration date.

More info can be found in this article.

Types of Permits and Approvals Covered by PEA in previous iterations:

  1. Soil erosion and sediment control plan.
  2. Waterfront development permit.
  3. Permit issued pursuant to the Wetlands Act of 1970.
  4. Permit issued pursuant to the Freshwater Wetlands Protection Act.
  5. Application for development granted by the Delaware and Raritan Canal Commission pursuant to the Delaware and Raritan Canal State Park Law of 1974.
  6. Permit issued by the New Jersey Meadowlands Commission.
  7. Application for development granted by the Pinelands Commission and determination of municipal and county plan conformance pursuant to the Pinelands Protection Act.
  8. Permit issued and center designations pursuant to the Coastal Area Facility Review Act.
  9. Septic approval granted pursuant to Title 26 of the Revised Statutes.
  10. Right-of-way permit issued by the Department of Transportation.
  11. Permit granted by a sewerage authority pursuant to the sewerage authorities’ law.
  12. Permit granted by a municipal authority pursuant to the municipal and county utilities authorities’ law.
  13. Permit by a county planning board.
  14. Preliminary and final approval granted in connection with an application for development pursuant to the Municipal Land Use Law.
  15. Permit granted pursuant to the State Uniform Construction Code Act.
  16. Plan endorsement and center designations pursuant to the State Planning Act.
  17. Permit or certification issued pursuant to the Water Supply Management Act.
  18. Permit granted authorizing the drilling of a well.
  19. Certification or permit granted, exemption from a sewerage connection ban granted, wastewater management plan approved and pollution discharge elimination system permit pursuant to the Water Pollution Control Act.
  20. Certification granted pursuant to The Realty Improvement Sewerage and Facilities Act (1954).
  21. Certification or approval granted pursuant to P.L.1971, c.386 (state approval of a subdivision covering 50 or more realty improvements).
  22. Certification issued and water quality management plan approved pursuant to the Water Quality Planning Act.
  23. Permit granted pursuant to the Safe Drinking Water Act. (24) Permit issued pursuant to the Flood Hazard Area Control Act.
  24. Municipal, county, regional or state approval or permit granted under the general authority conferred by state law or rule or regulation, or any other government authorization of any development application or any permit related thereto whether that authorization is in the form of a permit, approval, license, certification, permission, determination, interpretation, exemption, variance, exception, waiver, letter of interpretation, no further action letter, agreement or any other executive or administrative decision that allows a development or governmental project to proceed.

Recommendations

There are some proactive steps that can be taken to preserve existing permits and approvals. We recommend looking into the following general avenues of potential relief. Part II of this article reviews specific strategies to extend permits and approvals of interest to builders and developers.

  • For approvals under the Municipal Land Use Law (“MLUL”), apply for available extensions with the planning board or zoning board.The PEA does not affect the planning board or zoning board’s ability to grant extensions.
  • For permits and approvals granted by state agencies or other governmental jurisdictions, apply for available extensions provided under the specific program. The PEA does not affect the ability of government agencies to grant these other extensions. Many of the permits and approvals covered by the PEA have built-in mechanisms to obtain extensions. The statute and/or regulations may establish a deadline for when extension applications are due (i.e., 30 days prior to expiration, 90 days prior to expiration, etc.).
  • Take advantage of any non-PEA tolling provisions provided for under the MLUL or other government programs.For example, under the MLUL, if the developer is barred from proceeding with the development by a legal action or governmental or judicial order or directive to protect the public health and welfare, the approval is tolled, provided that the developer is otherwise ready, willing, and able to proceed.N.J.S.A. 40:55D-21.
  • Vest the permit by starting to build.As a general rule, under New Jersey law, once there has been “substantial reliance” on a permit, through construction or other actions, rights in the permit become vested, and irrevocable. Whether or not rights in a specific permit have become vested is a highly fact-sensitive inquiry.In some cases, the statute or regulations for the individual permit provide guidance. New Jersey law provides that there is “no easy formula” to determine when a permit becomes vested. See Tremarco Corp. v. Garzio, 32 N.J. 448, 457 (1960). The analysis requires a balancing “between the interests of the permitee and the rights and duty” of the government to make rules and regulations for the good of the public.

More info can be found in this article.

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