Real Property & Environmental Law Alert : New Jersey, New York, Pennsylvania & Delaware Lawyers & Attorneys for Real Estate Development & Environmental Law

In our electronic age, New Jersey’s antiquated laws governing document recordation were in serious need of some updates. A new law was recently passed modernizing the New Jersey Statutes by requiring the acceptance of electronic alternatives to paper documents, in addition to paper documents. In addition, provisions of the statute, disbursed over various sections that logically belonged together, have been compiled in a more concise and coherent fashion, and antiquated language and procedures have been removed. The revisions clearly result in a much more reader- friendly version of the law relating to title recordation in New Jersey.

Assembly Bill A-2565 P.L.2011, c.217 revising the New Jersey statutes pertaining to the recording of title documents was signed into law by Governor Christie on January 17, 2012. The New Jersey Law Revision Commission (NJLRC) approved this revision project following the enactment of the federal Electronic Signatures in Global and National Commerce Act (E-sign), and New Jersey’s enactment of the Uniform Electronic Transactions Act (UETA). The legislative statements (Statements) issued by the Senate Community and Urban Affairs Committee (Senate) and Housing and Local Government Committee (Assembly) related to A-2565 note that “while the use of electronic deeds and mortgages is not expected to occur in the near term, both E-sign and UETA encourage the development of systems that will accept electronic documents without disrupting the ongoing process of title recordation.”

Title 46, chapters 15 to 26 of the New Jersey statutes currently govern the recording and indexing of title documents. Most of these statutes were written when recording meant storing and including paper documents in large books. Amendments then allowed recording offices to microfilm documents and later permitted the use of any other method of recording that was “in conformance with rules, standards and procedures promulgated by the Division of Archives and Records Management (Division) in the Department of State (Department) and approved by the State Records Committee pursuant to its authority under section 6 of P.L.1994, c.140 (C.47:1-12) and the “Destruction of Public Records Law.” The recording system is intended to be fluid, preventing its extinction, by allowing for the approval of new methods of recording documents as recording technology advances. However, as the Senate and the Assembly note, with an increase in the use of new recording methods, comes an increase in the need for regulatory authority to assure uniformity.

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Jennifer M. Porter, Esq., a Director in the Gibbons Real Property & Environmental Department, will be a speaker at Lorman’s New York CLE Program SEQRA, on Friday, March 9, 2012 in Latham, New York.

The all-day program will provide a comprehensive overview of New York’s State Environmental Quality Review Act (SEQRA) including specific discussion on regulatory requirements and compliance, the integration of SEQRA with the project review process, cumulative impacts and segmentation and how to use SEQRA to obtain a better project without bankrupting the applicant. Ms. Porter will be part of the afternoon panel and will be discussing SEQRA litigation issues including the statute of limitations, standing to sue, defending or attacking negative declarations and procedural and substantive judicial review.

The program is designed for attorneys, engineers, architects, city and county planners, environmental professionals, presidents, vice presidents, water resource specialists, public works directors, surveyors and project managers. For more information and to register for the program, click here.

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Apparently concerned that the economy may not be recovering rapidly enough, the 215th New Jersey Legislature now convened, introduced a new bill (A337) on January 10, 2012, by Assemblyman Ronald S. Dancer of District 12, to change the definition of the “extension period” under the Permit Extension Act so that it runs through December 31, 2015. Therefore, based on the 6-month tolling provision currently in the Permit Extension Act, approvals received for development applications during the extension period could be extended as far out as June 30, 2016. Bill A337 has been referred to the Assembly Housing and Local Government Committee.

In 2008, as the economy was sliding into recession, the New Jersey Legislature passed the “Permit Extension Act,” which tolled the expiration of all development approvals that were granted during the “extension period” as defined in the statute. The intent was to preserve the benefit of permits until the economy improved. The “extension period” is currently defined as “the period beginning January 1, 2007 and continuing through December 31, 2012.” The definition of “approvals” under the Permit Extension Act covers most permits issued by State rule or regulation, including, preliminary and final approvals for development applications under the New Jersey Municipal Land Use Law.

If signed into law, Bill A337 could provide developers with an opportunity to wait a little longer for the economy to turn around in order to build projects that have received approvals and are considered dormant at the present time.

Jason R. Tuvel is an Associate in the Gibbons Real Property & Environmental Department.

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On January 17, 2012, Governor Chris Christie signed into law a bill allowing out-of-state winemakers to sell directly to New Jersey consumers and retailers. The bill was in response to the Third Court’s decision in Freeman v. Corzine, which we reviewed on this blog a year ago. The decision invalidated a New Jersey law allowing certain New Jersey farmers and wineries to skip wholesalers and sell directly to retailers and consumers. The Court determined that the law ran afoul of the Constitution’s Dormant Commerce Clause because it imposed restrictions benefiting in-state wineries and farmers at the expense of their out-of-state competitors. This new law is intended to balance the competing rights of in-state and out-of-state wineries.

The Third Circuit ordered the case remanded to the District Court to remedy the constitutional violation. In short, the District Court was being asked to choose between (1) extending the same in-state privileges to out-of-state wineries and farms, or (2) nullifying the privileges enjoyed by in-state wineries and farms. Rather than leaving the matter with the courts, state legislators introduced several competing bills aimed at resolving the violation. On July 25, 2011, at the request of all parties, the District Court ordered the case “administratively terminated” through March 2012 in anticipation of a legislative resolution.

After months of back and forth negotiations, the new law finally garnered enough votes to pass on the final day of the 2010-2011 legislative session. The law is a compromise measure that will resolve the constitutional issues identified in Freeman v. Corzine and protect New Jersey wine growers’ right to sell directly to consumers. As a result, the District Court litigation has been rendered moot.

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In December, we reported on the release of a draft report from United States Environmental Protection Agency’s (EPA) Office of Research and Development on a possible link between groundwater contamination in some Wyoming wells and hydraulic fracturing (“fracking”) activity in the area. Now, as promised, EPA is initiating an independent assessment of the report by outside peer reviewers.

The EPA report garnered intense attention from both proponents and opponents of fracking, which extracts natural gas from underground rock formations through the pumping of a pressurized mixture of water, sand, and chemicals that creates cracks, or fractures, in the rock, allowing the trapped gas to escape, flow into the well and up to the surface. Concerns over groundwater contamination could delay or limit fracking in New York, Pennsylvania, and a number of other states.

EPA published a Federal Register notice on January 17, 2012 that seeks nominations for experts to review the draft report as well as all public comments received during a comment period that will close on January 27. An EPA peer review contractor will select five to seven outside reviewers from among those nominated.

The agency is looking for recognized experts in a variety of fields (e.g., petroleum engineering, hydrology, geophysics, and water quality) who have no financial conflicts of interest or whose position would otherwise create an appearance of a lack of impartiality. Nominations (preferably via e-mail) must be submitted by February 17.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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Pennsylvania’s state-run stores could be on the verge of losing their decades-old monopoly on wine and liquor sales. On December 13, 2011, the Pennsylvania House of Representatives’ Liquor Control Committee voted 15-10 to approve an amended version of Pennsylvania House Bill 11, (“Pa. H.B. 11”), which would allow the state’s 1,200 beer retailers to sell wine to the public, in competition with the Pennsylvania Liquor Control Board’s (“PLCB”) 620 state-run stores. Notably, large supermarket chains within the state stand to gain an enormous benefit from the proposed law, which would allow for the first time in-store wine sales, as well as limited in-store tasting events. The proposed legislation now sits before the full House, awaiting floor debate, additional amendments, and a possible vote. The process could begin as early as this month.

Under the amended proposed law, a license to sell wine, called an “enhanced distributor’s license,” would be available to any “holder of a distributor license” - i.e., an entity currently selling beer in the state - after payment of a “conversion fee” of $50,000. In addition, an enhanced distributor would be required to pay an annual $15,000 renewal fee. The enhanced distributor licenses would be subject to the same population-tied cap as the current distributor licenses. Presently, the number of distribution licenses available for the retail sale of beer is limited to one license for every 3,000 inhabitants in any county, exclusive of licenses granted to certain public venues and other venues specifically identified by the Legislature.

The original version of Pa. H.B. 11 sponsored by House Majority Leader Mike Turzai and supported by Gov. Tom Corbett, would have gone even farther in breaking up the state-run monopoly. The original bill called for the complete privatization of all retail and wholesale wine and liquor sales in the state by closing and selling all state-run stores. A study commissioned by the bill’s proponents indicated that the sales could generate between $1.3 and $1.9 billion up front, with an additional $400 million in annual revenues thereafter. Following the sale of state-run stores, there would be a public auction of 1,250 retail licenses to sell beer, wine, and liquor to the highest bidders. Because the current version of the bill keeps the state-run stores open, the re-employment provisions contained in the first draft of the bill that were designed to assist displaced PLCB employees find new employment have been deleted in the amended bill.

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New York’s Appellate Division, First Department, in 135 East 57th Street LLC v. Daffy's Inc. was faced with the following facts. A retail chain had occupied high profile space for about 15 years. The tenant had the right to renew by notice to the Landlord to be delivered by January 31, 2010, a year prior to lease expiration. For no reason other than a mistake by the tenant's controller, notice was not timely given. However an email and fax was sent (dated January 30, 2010) on February 4, 2010, purporting to exercise the option. The landlord on February 5, 2010, rejected the notice as being late, and accused the Tenant of back-dating the notice for its own purposes.

The trial court, for reasons which are not set forth in the appellate opinion, determined the tenant was entitled to equitable relief, and determined the notice exercising the renewal period, although not timely, was nonetheless effective.

The Appellate Division, reviewed the existing law of New York on honoring technically defective lease extension notices and summarized same, quoting Vitarelli v. Excel AutomotiveTech. Ctr., Inc., 

Equity will relieve a tenant from a failure to timely exercise an option in a lease to renew or purchase if  (1) the tenant in good faith made substantial improvements to the premises and would otherwise suffer a forfeiture, (2) the tenant's delay was the result of an excusable default, and (3) the landlord was not prejudiced by the delay.

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