november 2002

New Jersey’s New Private Well Testing Act Requires Sampling of Private Drinking Water Wells as a Precondition to the Sale of Real Estate

BACKGROUND

Every year an estimated 20,000 to 30,000 real estate transactions involve properties with private wells. The new law, which became effective on September 14, 2002, applies to commercial and residential properties that either (1) have their own drinking water wells or (2) obtain drinking water from an off-site well that has less than 15 service connections or does not regularly serve an average of at least 25 individuals daily at least 60 days per year.

All contracts for the sale of real property services by a private drinking water well must now include a provision requiring, as a condition of sale, the sampling of the water supply for certain natural and man-made substances. Closing of title cannot occur unless both the buyer and the seller have received and reviewed a copy of the sample results.

In addition, starting in March 2004, landlords of subject properties will have to sample the drinking water at their property at least once every five years and provide copies of sample results to tenants. Landlords will also have to provide a copy of the most recent test results to each new tenant.

Testing labs are required to provide sample results to the New Jersey Department of Environmental Protection (DEP). County authorities will receive notice from DEP when a sample result reveals that contamination concentrations exceed applicable standards. County agencies may then issue notices to other nearby property owners serviced by private wells, suggesting that they sample their wells. However, the County may not reveal the location of the private well that triggered the notification.

WE RECOMMEND

Although the Well Testing Act requires sampling of the drinking water supply prior to purchase and sale of real estate, there are no provisions describing how to proceed if contaminants are detected exceeding applicable standards. We recommend that you carefully evaluate the allocation of such liability when negotiating your real estate contracts and leases.

If you have any questions concerning the new PWTA, please contact David B. Farer or Jay A. Jaffe.