NEW JERSEY REAL ESTATE EXAM COMMISSION
RULES & REGULATIONS
A salesperson may not:
§ accept any form of compensation except from his or her supervising broker;
§ maintain an escrow account or hold funds belonging to others; or
§ work for more than one New Jersey broker at a time.
Every broker who is a resident of New Jersey must
maintain a place of business in the state.
If the office is in the broker's own home it must have
a separate area with its own entrance visible from the street.
The office can never be
in the home of a broker’s associate.
Must be displayed on the exterior of the building
The broker’s name and the words “Licensed Real Estate Broker”
The license of the broker and those of any associates should be
prominently displayed in the main office
A broker may not allow
someone else to use the firm name.
The main office and the persons working in it must be
under the full-time direct supervision of either the broker or a qualified broker-
salesperson
Full-time means
the supervising licensee is physically present at the office during usual business
hours five days a week and is not otherwise employed.
, Each branch office must be under
the direct supervision of a broker or broker-salesperson and must have a duplicate
license. Additionally, the names of all licensees and the branch office supervisor
must be recorded with the Commission and prominently displayed in the branch
office, along with the office license. No branch office can be in the home of a
salesperson or broker-salesperson.
A broker must establish a separate, special
trust account, also known as an escrow account, in an authorized financial
institution in New Jersey, to be used for the deposit of all money belonging to
other persons (earnest money deposits, rent collections, and the like). The name of
the financial institution and the account number must be reported to the
Commission both at license application and at the time of renewal.
Separate Escrow Accounts for Each Transaction
are not needed
The account must be clearly labeled so that it cannot
be claimed by creditors in the event of a bankruptcy or by heirs at the broker's
death.
Brokers are required to deposit funds coming into their keeping "promptly," which
the Commission defines as
within five business days of acceptance. Salespersons should immediately give
any escrow monies they receive to their broker
Commingling (Mixing of funds)
Brokers are specifically prohibited from commingling (mixing) their own funds
with money in the trust account. In some circumstances, the broker may be
authorized to collect a commission directly from money held in the escrow
account. In that case, the business ledger should document the source of the
authorization and the amount and source of the commission, and the money should
be taken out promptly after authorization. Leaving such money in the account for
more than five business days might result in commingling. The broker is, however,
allowed to leave a nominal amount of his or her own money in the account to
cover service charges and keep the account open.
RULES & REGULATIONS
A salesperson may not:
§ accept any form of compensation except from his or her supervising broker;
§ maintain an escrow account or hold funds belonging to others; or
§ work for more than one New Jersey broker at a time.
Every broker who is a resident of New Jersey must
maintain a place of business in the state.
If the office is in the broker's own home it must have
a separate area with its own entrance visible from the street.
The office can never be
in the home of a broker’s associate.
Must be displayed on the exterior of the building
The broker’s name and the words “Licensed Real Estate Broker”
The license of the broker and those of any associates should be
prominently displayed in the main office
A broker may not allow
someone else to use the firm name.
The main office and the persons working in it must be
under the full-time direct supervision of either the broker or a qualified broker-
salesperson
Full-time means
the supervising licensee is physically present at the office during usual business
hours five days a week and is not otherwise employed.
, Each branch office must be under
the direct supervision of a broker or broker-salesperson and must have a duplicate
license. Additionally, the names of all licensees and the branch office supervisor
must be recorded with the Commission and prominently displayed in the branch
office, along with the office license. No branch office can be in the home of a
salesperson or broker-salesperson.
A broker must establish a separate, special
trust account, also known as an escrow account, in an authorized financial
institution in New Jersey, to be used for the deposit of all money belonging to
other persons (earnest money deposits, rent collections, and the like). The name of
the financial institution and the account number must be reported to the
Commission both at license application and at the time of renewal.
Separate Escrow Accounts for Each Transaction
are not needed
The account must be clearly labeled so that it cannot
be claimed by creditors in the event of a bankruptcy or by heirs at the broker's
death.
Brokers are required to deposit funds coming into their keeping "promptly," which
the Commission defines as
within five business days of acceptance. Salespersons should immediately give
any escrow monies they receive to their broker
Commingling (Mixing of funds)
Brokers are specifically prohibited from commingling (mixing) their own funds
with money in the trust account. In some circumstances, the broker may be
authorized to collect a commission directly from money held in the escrow
account. In that case, the business ledger should document the source of the
authorization and the amount and source of the commission, and the money should
be taken out promptly after authorization. Leaving such money in the account for
more than five business days might result in commingling. The broker is, however,
allowed to leave a nominal amount of his or her own money in the account to
cover service charges and keep the account open.
