CSG Law Alert: Department of Community Affairs to Establish a New Jersey Design Professional Self-Certification Program
On August 22, 2024, the State of New Jersey enacted the “New Jersey Design Professional Self-Certification Act” (the “Act”). The Act will be effective as of December 1, 2024.
Under the Act, the Commissioner of the Community Affairs will establish a self-certification program through which an architect or a professional engineer (“Design Professionals”) can become a “Qualified Design Professional.”i Qualified Design Professionals will be able to (1) take responsibility for a project’s compliance with the State Uniform Construction Code, and (2) self-certify that an application for a construction permit complies with the State Uniform Construction Code and the requirements of other applicable laws. Following a supervisory check on the application materials, the Department of Community Affairs (“NJDCA”) will issue a construction permit. A self-certified construction permit will have the same force and effect as a permit issued by the NJDCA.
What Types of Projects: The program is available for repair, renovation, alteration, and reconstruction projects and only applies to certain use groups with square footage limitation.ii It is not available for new construction. Additionally, the Act specifies projects that are not able to be self-certified, including, without limitation, those that involve a new commercial kitchen.iii
Required Retention of Qualified Design Professional Through Completion: The Act requires that the Qualified Design Professional of record remain with the project until the project receives final sign off by the enforcing agency (i.e., letter of completion or certificate of approval). If the Qualified Design Professional of record withdraws from a project before the enforcing agency’s issuance of a letter of completion or certificate of approval, all work shall cease and no permit, letter of completion, or certificate of approval shall be issued until (1) a successor qualified design professional is designated as the qualified design professional of record and satisfies the requirements set forth in this section; and (2) (a) the successor qualified design professional submits a professional certification confirming the qualified design professional’s concurrence with the construction documents accepted by the enforcing agency; or (b) new construction documents are approved or accepted by the enforcing agency. Notably, the Act does not speak to the impact on the project if the Qualified Design Professional is terminated by the owner, but we expect the result would be the same as outlined above.
Benefit or New Exposure: Availing oneself of this program may expedite the issuance of a building permit for qualifying projects. However, owners and Qualified Design Professionals should both carefully consider the potential risks associated with this program.
Owner: If the owner’s Qualified Design Professional of record were to terminate its contact with the owner, with or without cause, the owner would be required to cause all work to cease. The resulting losses and delays could dramatically outweigh any benefit from an expedited construction permit. Also, as noted above, “assuming” that termination by the owner of the Qualified Design Professional would similarly require a project shut down pending appointment of a replacement Design Professional or approval of new plans, (i) if termination were without cause, the owner would bear all resulting delays and losses, and (ii) if termination were for cause, owner may not be able to recover those losses from the terminated Design Professional.
Design Professionals: The program would seem to give Design Professionals significant leverage against an owner which might otherwise seek to terminate the Design Professional with or without cause, given that the result would likely be the (temporary) shut down of the owner’s project. However, if a Design Professional were to withdraw from a project, the owner would likely sue for its resulting losses and delays, exposing the Design Professional to significant damages. Design Professionals should understand the reputation risk associated with taking responsibility for a project’s compliance, and for those Design Professionals which violate the program, they will be publicly listed as such unless and until they were requalified.iv
Before You Use the Program: Owners and Design Professionals should carefully consider whether an expedited construction permit process is worth the potential exposure when entering into a contract where the Design Professional will avail itself of the self-certification program. However, for more complicated projects with extended construction schedules, parties should think carefully before choosing this route for issuance of the construction permit. Your CSG attorney can help to evaluate the benefits, potential losses, risk mitigation strategies and contract considerations.
i While the Commissioner of the Community Affairs is still developing the details of the self-certification program, Design Professionals who are interested in becoming Qualified Design Professionals can prepare for when the Act takes effect by (a) being licensed to be a Design Professional, (b) being licensed by the department to inspect high-rise and hazardous structures, and (c) proof of, or a certificate demonstrating, professional liability insurance coverage, issued by an insurer authorized to provide insurance coverage in the State of New Jersey, which provides coverage with limits that are no less than $500,000 per claim, and $1,000,000 in the aggregate, for all claims made during the policy period.
ii (1) Group B occupancies up to 9,000 square feet; (2) Group F-1 occupancies up to 8,500 square feet; (3) Group F-2 occupancies up to 13,000 square feet; (4) Group M occupancies up to 9,000 square feet; (5) Group R-1 occupancies up to 7,000 square feet; (6) Group R-2 occupancies up to 7,000 square feet; (7) Group R-3 occupancies up to 4,800 square feet; (8) Group R-4 occupancies up to 7,000 square feet; (9) Group R-5 occupancies up to 4,800 square feet; (10) Group S-1 occupancies up to 9,000 square feet; and (11) Group S-2 occupancies up to 13,500 square feet.
iii Not available for the following (1) projects where plan review is reserved solely to the NJDCA; (2) projects that include a new commercial kitchen; (3) projects that include new electrical service exceeding 400 amps; (4) projects that include structural alterations involving lateral design, or any project that requires a special inspection pursuant to the State Uniform Construction Code; and (5) prototype plan submittals.
iv The Act grants the NJDCA the right to audit projects and impose penalties Qualified Design Professionals who violate the requirements of the Act. A list of penalized Qualified Design Professionals will be kept on the NJDCA’s website.