Dealing with the New Jersey

Private Well Testing Act

 

Dateline: February, 2003

By: Eric S. Kapnick, Esq.

 

Overview:

The New Jersey State Legislature recently enacted the Private Well Testing Act, N.J.S.A. 58:A-26 et seq. ; (“The Act”) and its implementing regulations, N.J.A.C. 7:9E et seq.; (The Rules”) which became effective as of September 14, 2002.

The Act and the Rules impose significant contractual, sampling and reporting obligation for Sellers,  Realtors, Real Estate attorneys and Buyers in connection with real estate transactions in which there is a potable well located on the property.

The Act requires the testing of the water supply in connection with the sale of the following real estate: 1) any property which obtains its drinking water from a private well located on the property or 2)  any property that obtains its drinking water from a well with less that 15 service connections or that does not regularly serve an average of at least 25 people daily at least 60 days out of the year.

The Act, and specifically N.J.S.A. 58:A-28(A) expressly requires that every contract of sale in which the Act applies shall contain a provision, that the testing of the well be made a condition of sale.  In fact, the closing of title is expressly prohibited unless both the seller and buyer certify in writing that they have reviewed and are in receipt of the test results.

The Act also provides that, commencing March 6, 2004, all rental property that receives its water supply from a well located on the property shall be tested and the results provided to each Lessee of the property.  The initial testing must be completed by mid-March 2004 and the property must be retested, and the Lessees provided with the results of testing  at least every five (5) years thereafter.  Lessors will also be required to provide to each new Lessee a written copy of the most recent test results. 

The Act requires that all covered property be tested for pH, coliform, nitrates, iron, manganese, lead and volatile or organic compounds.      In certain designated counties, additional sampling is required for arsenic, radium and mercury.  The Rules require that all testing and sampling be performed by a New Jersey Certified Laboratory or a certified representative of said laboratory.

 

What is the impact of the Act:

The good news to Sellers, Brokers and Attorneys  of REO properties in New Jersey is that  although the Act contains specific testing requirements and prohibitions on closing it does not mandate who shall be responsible for the cost of the well testing.  Accordingly, brokers and attorneys  while preparing the contract of sale should draft and include language which specifically sets forth that Buyer shall be solely responsible for all costs associated with the well testing.

In addition, and of greater value to Sellers, is that the Act does not contain any enforcement or penalty provisions for wells that fail the testing or for parties that fail to follow the reporting requirements contained in the Act and accompanying regulations.  The Act simply mandates that the closing of title may not take place unless, and until, the buyer and seller certify, in writing, that they have received and reviewed a copy of the test results, whatever the results may reveal.

Thus, brokers and attorneys when drafting a contract of sale for property covered by the Act should include language in which it is clearly set forth that the property is being sold in an “as is” condition and that the Seller makes no representations concerning the quality of the water.  The contract should further provide that the Buyer will not require any remediation to the well and that the Buyer will at closing, certify in writing that they have received and reviewed the water results.  If such precautions are taken, the Act should not impact the sale of REO properties in New Jersey.

Sample language for the certification  or for the suggested contract language set forth above can be obtained by contacting the author of this article.

 

This Article is a service of the Creditors’ Rights Department and Real Estate Department of Fein, Such, Kahn & Shepard, P.C., 7 Century Drive, Suite 201, Parsippany, NJ 07960.  Phone: 973-538-4700. Website: www.feinsuch.com.  It does not constitute legal advice nor create an attorney-client relationship. 

 

Eric S. Kapnick, Esq. is a Shareholder of the Firm and serves as a member of National Committee of  REOMAC.  Mr. Kapnick specializes in representing lenders in both New Jersey and New York specializing in the areas of REO, Eviction and Foreclosure.  For more information, contact Mr. Kapnick at ekapnick@feinsuch.com

 

© 2003, Fein, Such, Kahn & Shepard, P.C., all rights reserved.  Permission is granted to reproduce and redistribute this article so long as (i) the entire article, including all headings and the copyright notice are included in the reproduction, and (ii) no fee or other charge is imposed.