New Law Amends Construction Inspection Process

Jan 13, 2023 | Written by: Tara A. St. Angelo, Esq. | Share

On January 5, 2023, New Jersey Governor Murphy signed Bill A573 amending the Uniform Construction Code (UCC) in an effort to streamline and speed up the construction permitting process.  Under the new legislation, the municipality must conduct a construction inspection within three days of a request.  After the three-day period, developers are permitted to contract with a private inspection agency to conduct the required inspections.  The private inspection agencies must be licensed by the Department of Community Affairs (DCA), which is working to implement the new process and the approval of private inspection agencies within the next nine months. 

Under the new law, the construction permitting process is as follows:

• The property owner or developer must provide twenty-four hours’ written notice to the municipality or enforcing agency requesting an inspection.  The municipality or other enforcing agency is required to perform the requested inspection within three business days.
• If the municipality or enforcing agency is unable to perform the required inspection in the required time, the municipality or enforcing agency must notify the requestor within twenty-hour hours of receipt of the request.
• The parties must attempt to agree on an alternative date.
• If the parties cannot agree to an alternative date, the owner or developer may contract with a properly licensed private inspection agency to perform the inspection.  Written notification of the private inspection must be provided to the municipality or enforcing agency.  The municipality or enforcing agency will still be responsible for issuing a temporary or final certificate of occupancy.
• If the municipality continuously fails to meet deadlines, the owner or developer can request authorization from the DCA to utilize a licensed private inspector for the remainder of the project.
• At the “conclusion of the project” (presumably the issuance of a final certificate of occupancy), the municipality or enforcing agency shall “perform a fee reconciliation” for the cost of the private inspection.  “This reconciliation shall be based on the fees already paid less administrative costs for the enforcing agency and shall not exceed the amount already paid for the project, nor shall it exceed the amount that the enforcing agency is authorized to impose for inspections, and shall take into account the administrative costs of the enforcing agency.”  In essence, it appears as though the municipality will have to return the permit fees minus an administrative fee.

The new law does attempt to alleviate the burden on municipalities by allowing municipalities to contract with private inspection companies or enter into shared services agreements with other municipalities.  Under the new law, contracts with private inspection companies will be exempt from public bidding requirements and can be awarded through the competitive contracting (i.e., quote) process.

Municipalities are required to establish a process to comply with the three-day inspection time frame and report annually to the DCA regarding their compliance with the new law. Municipalities may be fined for systematically failing to meet deadlines, failing to provide sufficient staffing to meet the required deadlines, and failing to report the required information to DCA.

The new law imposes a costly burden on municipalities, that is compounded by the possibility of fines.  Therefore, what can your municipality do to prepare for the implementation of this new law?

1. Amend any ordinances to be compliant with the new law. 
2. Review ordinances to ensure that permit fees are sufficient to cover the administrative and inspection costs.  J.A.C. 5:23-4.17(c) permits municipalities to charge fees for construction permits to “reasonably cover the municipal costs of enforcing the regulations.”  These fees may have to be amended further if it becomes necessary to hire a supplemental inspection company.
3. Discuss with your code officials the current wait times for permit inspections and whether a shared services agreement or contracting with a private entity is necessary.
4. Explore the possibility for a shared services agreement with another municipality.
5. When the DCA establishes licensing for private inspection companies, obtain quotes from such companies.

 

Tara St. Angelo, Esq. concentrates her practice primarily in the areas of municipal and land use law.  She was named to the NJ Super Lawyers Rising Stars list for State, Local and Municipal law by Thomson Reuters in 2017, 2018, 2019, 2020, 2021, and 2022. Contact Ms. St. Angelo at Gebhardt & Kiefer, PC at 908-735-5161 or via email.

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Any statements made herein are solely for informational purposes only and should not be relied upon or construed as legal advice.