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On November 17, 2025, the New Jersey Department of Environmental Protection (NJDEP) changed its previously proposed rule which would have required persons conducting All Appropriate Inquiry (AAI)(due diligence) at real properties to report any discharge of contamination discovered during the due diligence to NJDEP and the record owner of the property. NJDEP has now changed its proposed rule to require that discovered discharges of contamination be reported only to the record owners of the real property. NJDEP's reproposed rule, however, introduces a new legal requirement for persons conducting due diligence at properties in New Jersey, and will significantly affect how real estate transactions and the management of environmental contamination at those properties are handled.
NJDEP Withdraws its Originally Proposed Due Diligence Discharge Reporting Rule
On October 21, 2024, NJDEP proposed a new due diligence discharge reporting rule, N.J.A.C. 7:26C-2.4, and a revision to an existing rule, N.J.A.C. 7:26C-1.7, which required persons conducting All Appropriate Inquiry (AAI) (due diligence) at New Jersey real properties to report any discovered discharges of contamination on the properties to the NJDEP and the record owner of the property. The regulated community objected to this proposed due diligence discharge reporting rule as negatively affecting New Jersey real estate transactions and the management of environmental contamination and risks at real properties, including brownfields and contaminated sites.
The Reproposed Rule: Persons Conducting Due Diligence Must Notify the Record Property Owner of Discovered Discharges of Contamination
Under the reproposed due diligence discharge reporting rule, if a person conducting due diligence discovers a discharge during the conduct of due diligence, that person must notify the record property owner of the discovered discharge. All persons conducting due diligence have this reporting obligation, including, without limitation, environmental consultants, New Jersey Licensed Site Remediation Professionals (LSRPs), and other persons. Once the record property owner is notified of the discharge, the record property owner has the legal responsibility to report the discovered discharge to NJDEP under the New Jersey Spill Act and to initiate remediation of the contamination at the real property.
Implications of NJDEP's Reproposed Due Diligence Rule For Environmental Due Diligence
NJDEP's reproposed due diligence discharge reporting rule will require a substantial change to how environmental due diligence is conducted at New Jersey real properties. If adopted by NJDEP, persons involved in real estate transactions at New Jersey properties will need to reexamine how they conduct environmental due diligence and assess and allocate environmental risks of those properties. Sellers and Prospective Purchasers of real properties in New Jersey should consult knowledgeable legal counsel to determine how the reproposed NJDEP due diligence discharge reporting rule affects their particular situation.
Scarinci Hollenbeck's Environmental & Land Use attorneys have extensive experience advising clients on NJDEP regulatory compliance, ISRA and Spill Act obligations, site remediation and environmental risk management in complex real estate and industrial matters. Our team regularly counsels purchasers, sellers, lenders and responsible parties on diligence strategy and regulatory considerations that intersect with NJDEP oversight.
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