What should I consider before buying land for my business?
Industrial Site Recovery Act (ISRA)
A business planning to buy land to build offices, homes or a commercial facility on a former industrial site should know what is above and below the ground. Businesses that are considering buying another company’s operation must be willing to assume the liabilities for past improper handling of hazardous materials. These liabilities for cleanup and damages may far surpass the value of the operation.
Owners may find it increasingly difficult to borrow the funds from mortgage lending institutions to buy that plant or site for expansion because property used for collateral may have been rendered worthless due to the discovery of environmental contamination.
Today, environmental lawsuits are common. State and federal governments and the courts take an increasingly tough stance against those responsible for the existence of contamination, which can mean the difference between being considered innocent or being considered responsible for millions of dollars in damages and cleanup costs.
New Jersey offers the nation’s model buyer protection program for a wide variety of manufacturing operations covered by the state’s Industrial Site Recovery Act (ISRA).
Buyers and lenders are assured that any New Jersey industrial operation subject to ISRA be fully evaluated for contamination, above and below the ground.
Under ISRA, any environmental contamination, which poses a risk to public health and the environment, will be required to be identified and remediated by the seller.
This type of buyer protection program has been the norm for years in residential and commercial applications in termite, electrical, sewage and plumbing inspections. It is crucial that potential buyers and lenders know that what they are buying is a fair return for their investment.
New Jersey’s ISRA goes the next step in responding to the realities of industrial society and is designed to ensure that sellers do not leave behind more than the buyer bargained for.
New Jersey’s ISRA Program: