By Joseph R. Haftek, Jr. and Franklin Barbosa, Jr.

On January 5, 2023, New Jersey Governor Phil Murphy signed into law Assembly Bill 573 (“A573”), a measure designed to expedite the State’s construction permitting processes as set forth in the Uniform Construction Code. The bill, which was passed by the legislature in December of 2022, should make it quicker for builders to schedule inspections, obtain approvals and, most importantly, keep projects moving. In a state known for its bureaucratic inefficiencies and high cost of doing business, a law that may ultimately reduce the time and expense associated with construction permitting by speeding up the process is a welcome change.

The key component of the law codifies a time limit on inspection turnaround and affords builders the freedom to retain third-party, private inspection agencies to review their work under certain circumstances. Under the new regime, a builder can retain a private inspection company if the local public unit (defined as “enforcing agencies”) cannot perform an inspection within three business days of an inspection request. More specifically, the process works as follows: builders must give 24 hours written notice to the local unit of a request for an inspection, and the local unit must perform that inspection within three business days. If the local unit cannot perform the inspection within three business days, it must notify the builder in writing within 24 hours of receiving the builder’s inspection request, at which time the local unit and the builder can agree upon an alternate inspection date. However, if the local unit and builder cannot reach any such agreement, the law empowers the builder to retain the inspection services of a Department of Community Affairs-approved private contractor. If a local unit demonstrates a repeated inability to meet its three-day inspection requirement as to a specific project, the builder can notify the DCA of that issue, and the DCA may authorize the builder to use a private inspection company for all or a portion of the remaining inspections. The local unit is required to engage in a reconciliation process at the conclusion of a project for a builder’s costs associated with use of a private inspector, subject to certain limitations.

To assist local units with meeting their new, three-day inspection timeframe, the law permits the local units to enter shared services agreements with other municipalities or contract with private inspection agencies for inspection services.

A573 is the latest in a series of efforts by the State to improve its permitting processes. For example, back in 2021, the Governor signed Assembly Bill 1145 (“A1145”), which required the DCA to establish a “one-stop shop” online portal, known as the “Electronic Permit Processing Review System,” whereby builders can submit and track permitting applications and approvals, local units can review and approve applications, and the parties can schedule inspections. By consolidating the permitting, inspection, and approval processes into a singular medium, the law arguably made it simpler for builders to navigate the permitting process and reduced the typical burdens and expenses associated with obtaining multiple approvals. A573 very much complements the efficiency-improving provisions of A1145

In sum, A573’s measures should help reduce the all-too-common delays plaguing the State’s construction permitting process and ensure that projects can be completed in a more timely, orderly, and less expensive fashion. The State has certainly taken a step in the right direction in its efforts to streamline the permitting process and speed up inspections. However, as we all know, ideas look great on paper; the difficult part is realizing them. All that remains to be seen is how efficiently and effectively the State and its local units can implement the new law. Let’s keep our fingers crossed.

DISCLAIMER: This Alert is designed to keep you aware of recent developments in the law. It is not intended to be legal advice, which can only be given after the attorney understands the facts of a particular matter and the goals of the client.