Realty Transfer Fees

Realty Transfer fees have been in the news lately and in particular in a case decided October 30, 2009 by the Tax Court of New Jersey. In Mack-Cali Realty, LP, et al v. Clerk of Bergen County, et al, the question was presented as to whether the exemption from the realty transfer fee which is allowed by N.J.S.A. 46:15-10(a) where consideration is less than $100.00 applies to a conveyance made from one limited liability company to other limited liability companies in which it was the sole member.

Mack-Cali Realty, LP transferred title to other limited liability companies in which it was the sole member. The decision by the Tax Court states that a deed between commonly owned entities that transfer unencumbered real estate and for which no other consideration passed from the grantee other than the amount set forth in the deed, then that transfer is likely exempt from the realty transfer fee requirements.

The Tax Court defined “consideration” in terms of “the actual amount of money and the monetary value of any other thing of value constituting the entire compensation paid or to be paid for the transfer of title to the lands. The definition includes the amount of any mortgage to which the transferred property is subject, but does not include any element not paid by the grantee to the grantor. Therefore, it does not include an indirect benefit of the kind imputed by the New Jersey Division of Taxation in affirming the County Clerk’s determination that a realty transfer fee be imposed. The Tax Court therefore held that the consideration for each transfer was $10.00 as stated in the deed and the transactions were exempt from the realty transfer fee.

The decision may be appealed to the Appellate Division, however the decision currently stands.

New Jersey’s Site Remediation Reform Act

The Site Remediation Reform Act became effective on November 3, 2009. This act materially changes the role of the New Jersey Department of Environmental Protection (NJDEP) with regard to the remediation of contaminated property in New Jersey.

The purpose of the Act is to improve the speed of site clean-up and the Act is carefully designed to accomplish this purpose without lessening the stringent remediation requirements already in place in New Jersey.

The three reports of Known Contamination Sites of New Jersey are “Active Sites with Confirmed Contamination”, “Pending Sites with Confirmed Contamination”, and “Closed Sites with Remediated Contamination”. The reports consider ALL cases and activities at a site. There are over 20,000 sites in New Jersey at the present time.

Active Sites are those sites having one or more active case with any number of pending and closed cases.

Pending Sites are those sites having one or more pending cases, no active cases, and any number of closed cases.

Closed sites are those sites having only closed cases. Sites in this category have no active or pending cases.

The NJDEP will no longer directly supervise the remediation of contaminated sites but will now act in a compliance, enforcement and monitoring role of independent professionals who will be conducting this work. The professionals must be licensed by the Site Remediation Professional Licensing Board established by the NJDEP. The Board’s mandate is to establish licensing requirements for site remediation professionals and to over see the licensing and performance of site remediation professionals.

The Act also requires the NJDEP to inspect all documents and information submitted by a licensed site remediation professional, authorizes the NJDEP to review the performance of a clean up under a broad range of circumstances and mandates that the NJDEP undertake direct oversight of contaminated sites under certain conditions and authorizes, but does not require, NJDEP to undertake direct oversight under certain other conditions.

Hopefully the Act will speed up the site clean-up without losing the stringent remediation requirements already in place in New Jersey.

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