Newsletter Contents

NPD Winter/Spring 2010 Newsletter

Back to Legal News | Download as a PDF

NEW GOVERNOR TO PRIORITIZE ATLANTIC CITY GROWTH

New Jersey elected a new governor in 2009. Former U. S. Attorney Chris Christie of Mendham, Morris County was inaugurated as the 55th governor of the State of New Jersey at a swearing-in ceremony held on January 19, 2010 in Trenton. During the campaign, Christie pledged his support of Atlantic City’s gaming industry. The new governor will be able to make an impact on our region early, with agencies like the South Jersey Transportation Authority, the Atlantic City Convention and Visitors Authority and Casino Reinvestment Development Authority being subject to new appointments. One of his first actions as Governor was the approval of an executive order deeming Casino Control Commission employees as “essential” in the event of a government shutdown and the establishment of a gaming, entertainment and sports panel, which will give recommendations to the Governor on how to revive the casino industry. Its report is due June 30, 2010.

Christie’s decisions will affect the real estate development community as well. Not only has Christie called for a complete overhaul of New Jersey’s Council on Affordable Housing, but he has asked Lieutenant-Governor Kim Guadagno to head up a Red Tape Review Program to perform a top-to-bottom review of all state regulations – including environmental regulations – to make the state run more efficiently and to encourage new investment in New Jersey.

If you have an idea to present to the Red Tape Review Program or any other department of the Christie Administration, please contact Keith Davis, Esq. in our office who served on Governor Christie’s campaign leadership team.

FEDERAL STIMULUS MEANS TAX CREDITS FOR HOMEBUYERS

The Federal Government’s efforts to stimulate our economy continued into 2010 with the extension and creation of two tax credit based initiatives. First, the $8,000 first-time home buyer’s tax credit has been extended from November 30, 2009 to April 30, 2010. Second, a new $6,500 tax credit has been added for those who already own a home and decide to purchase a new one.

The $8,000 tax credit:

For first-time home buyers only, i. e. persons not owning principal residences in the three-year period prior to purchase;

Does not have to be repaid unless the new residence is not lived in for at least 36 months beginning on the purchase date.

Applies to residences purchased on or after January 1, 2009 and on or before April 30, 2010.
Allowed for residences purchased on or after January 1, 2009 and on or before November 6, 2009 for a single taxpayer with a modified adjusted gross income (“MAGI”) up to $75,000 and for married couples filing jointly with a MAGI up to $150,000.

Allowed for homes purchased after November 6, 2009 and on or before April 30, 2010 for a single taxpayer with a MAGI up to $125,000 and for married couples with a MAGI up to $225,000.

The $6,500 tax credit ($3,250 credit for singles):

For buyers who have owned and lived in their previous residence for five consecutive years out of the last eight years.

Does not have to be repaid unless the new residence is not lived in for at least 36 months beginning on the purchase date.

Applies to residences purchased after November 6, 2009 and on or before April 30, 2010. (In cases where a binding sales contract is signed by April 30, 2010, a purchase completed by June 30, 2010, will qualify. )

Has the same income limits as the $8,000 tax credit for residences purchased after November 6, 2009.

For more information on how you may be able to take advantage of these valuable tax credits, contact attorneys Anthony Bongiovanni and Kristopher J. Facenda in our office at (609) 927-1177.

THWARTING BUSINESS COMPETITION – A NEW FORUM?

Perhaps not surprisingly, some businesses often utilize any means available to stifle or avoid competition from new businesses. One area in which existing businesses have attempted to thwart new competition is under the guise of New Jersey’s rather complex land use laws.

New Jersey law permits any “interested party” to appear before a municipal planning or zoning board to object to land use approvals sought by a new business or to appeal in court any approvals ultimately granted by a municipal planning or zoning board to a new business. Generally, New Jersey courts have construed the term “interested party” broadly. However, courts have also made it clear that increased competition alone generally does not confer standing upon an objector. Some existing businesses have become more adept at disguising their attempts to utilize the land use process to serve their anti-competitive purposes. Some existing businesses now “recruit” and fund objectors who have standing to challenge land use approvals sought and obtained by their competitors.

It is important for applicants before municipal planning and zoning boards to know exactly who is objecting to their applications and who is funding these objectors. Objectors who are motivated solely by the threat of increased competition may well lack standing to appear before municipal planning and zoning boards or challenge decisions made by a municipal planning and zoning boards in court. Further, municipal planning and zoning boards may discredit or give little weight to objectors who were “recruited” and are funded by competitors of an applicant. If you intend to appear before a municipal planning or zoning board seeking to operate a commercial business and have any specific questions about this complex area of land use law, please do not hesitate to contact our office for further assistance.

APRIL 1 DEADLINE TO FILE TAX APPEALS

With real estate values declining, this year is the year when property owners should be reviewing their tax assessments to see whether a tax appeal is appropriate.

April 1, 2010 is the deadline to file tax appeals for 2010. In towns that are conducting a tax revaluation this year, such as Pleasantville and Northfield, the deadline to file an appeal is May 1, 2010. To see whether an appeal is appropriate, property owners should review the green card which they should have received from the Tax Assessor of the town in which the property is located which contains the 2010 assessment information. In municipalities which have a revaluation being implemented for 2010, the assessed value should equal the fair market value. If it does not, then an appeal is warranted. In municipalities that have not performed a revaluation recently, the assessment needs to be adjusted to reflect the ratio of assessed value to true value in that municipality. The ratios for the municipalities are available from the local Tax Assessor or the County Board of Taxation.

Sal Perillo has thirty years of experience handling major tax appeals all throughout the state. If you believe your property may be a candidate for a tax appeal, please contact Sal well in advance of the April 1, 2010 deadline.

THE PERMIT EXTENSION ACT…EXTENDED

As the economic downturn in the real estate market lingers and credit markets remain tight, legislators recently amended the “extension period” of the existing Permit Extension Act so that it now runs through December 31, 2012, extending some approvals through June 30, 2013. The legislation was signed into law by Governor Jon Corzine as one of his last acts. This legislation keeps many land use approvals alive for an additional two years beyond what is currently permitted in the existing the Permit Extension Act. Nevertheless, if you have a land use approval which may soon expire, you should confirm with the government agency issuing the approval that the Act covers it as there are several exceptions in the law. Contact NPD for assistance in confirming your extension.

COAH ABOLISHED–NOT QUITE

Powerful Union County Senator Ray Lesniak introduced the first bill in the new State Senate session which abolishes the Council on Affordable Housing (“COAH”). Most of COAH’s responsibilities are being shifted to the State Planning Commission with other responsibilities for affordable housing given to the New Jersey Economic Development Authority. The bill, if adopted, would resurrect Regional Contribution Agreements (“RCA’s”) but would require previously authorized RCA’s to be reviewed and approved under new standards. The Bill also gives municipalities standards for “inclusionary zoning” to meet their affordable housing obligation. It is unknown whether this Bill in this form has the support of the Governor although it appears to contain some of his sentiments. We will monitor this Bill as it proceeds.

THE NEW SITE REMEDIATION REFORM ACT – BIG CHANGES IN ENVIRONMENTAL CLEAN-UP

Intended to speed up the remediation of contaminated sites, the enactment of the new “Site Remediation Reform Act” has ushered in a new era with regard to environmental remediation in New Jersey. One significant change from existing laws is imposition of an affirmative obligation on responsible parties to remediate, not just report, a discharge of hazardous substances. Mandatory time frames for clean up are triggered from the date of the discovery of the discharge and these time frames are not suspended, extended or altered because of changes in ownership. Buyers, sellers, landlords and tenants involved in real estate transactions need to carefully take into consideration and address in their transaction documents this new approach and the requirements and obligations imposed by the Act.

Under the Act, a significant amount of power and responsibility is vested in the licensed site remediation professional, who is now the dominant force in remediation matters. DEP’s role has been significantly reduced. The professional is charged with supervising remediation efforts with little DEP oversight. The Act imposes upon the professional broad disclosure obligations to the DEP and to clients. For this reason, a seller may want to insist that a buyer use an individual who is not a “licensed site remediation professional” in conducting investigations for due diligence purposes.

The Act also changes the “No Further Action” Letter process. That letter is no longer the close-out document related to site remediation. Now, after remediation, the licensed site remediation professional will issue a Response Action Outcome (RAO) – the professional’s certification that the contaminated site has been successfully remediated. The RAO is subject to DEP audit for a period of three years.

Parties need to consider this, as well as all of the other new implications stemming from the Act, and have their contract documents appropriately drafted to reflect the new law.