NJ REAL ESTATE PRACTICE
x x x
Whoxmustxbexlicensed?x-
xanswerxanyonexwhoxtakesxpartxinxaxrealxestatextransactionxinxNJxforxanotherxpersonxforxaxfe
e,xcommission,xorxotherxvaluablexconsideration
RealxEstatexCommissionx-
xanswerxComposedxbyx8xmembersxappointedxbyxthexgovernor,x5xr/exbrokersxwhoxhavexbee
nxlicensedxasxsuchxforxatxleastxtenxyears,x2xmembersxarexchosenxfromxthexgeneralxpublic,xa
ndxonexmemberxrepresentsxaxdepartmentxofxthexstatexgovernment
Classesxofxlicensesx-
xanswerxbroker,xsalespersonx(supervisingxbrokerxprovidesx"guidancexandxdirection),xbroke
r-
salespersonx(choosesxtoxworkxinxaxsalesxcapacity)xandxreferralxagentx(referxbusinessxtoxact
ivexagents,xcan'txactxasxanxagentxthemselves)
Realxestatexlicensesxnotxrequiredxforx-
xanswerxownersxhandlingxtheirxownxproperty,xattorneys,xexecutors,xtrustees,xreceivers,xad
ministrators,xlegalxguardians,xandxothersxhandlingxrealxestatexunderxthexorderxofxaxcourt,xIn
surancexcompanies,xbanksxandxtrustxcompanies.
Qualificationsxforxlicensurexsalespersonx-
xanswer18xorxolder,xhsxeducationxorxequivalent,xcompletexax75-hourxpre-
licensingxcourse,xdisclosexone'sxsocialxsecurityxnumberxforxchildxsupportxenforcementxpurp
oses,xlegalxresidencexinxthexUS,xpassxaxstatexexamxandxbexsponsoredxbyxaxlicensedxbroker
Qualificationsxforxlicensurexbrokerx-xanswerxsuccessfullyxcompletex150-hourxpre-
licensingxcourse
Noxlicensexwillxbexissuedxtoxanyonexconvictedxofxthisxwithinxthexprecedingxfivexyearsx-
xanswerxforgery
Guarantyxfundx-
xanswerxestablishedxtoxreimbursexmembersxforxthexpublicxwhoxsufferxmonetaryxlossxduextox
wrongdoing.xFundsxcomexfromxfeesxpaidxatxfirst-
licensexapplication.xThexmaxxclaimxisx$20,000
Intestatexpropertyx-
xanswerxregulationsxarexcontainedxinxrealxestatexsalesxfullxdisclosurexactxandxbureauxofxsub
,dividedxlandxsalesxcontrolxmustxapprovexcertainxnewxout-of-statexpropertiesx-
xbuyersxhavexupxtoxsevenxcalendarxdaysxtoxcancelxcontractsxforxthexpurchasexorxleasexofxsu
chxlands
Rentalxreferralxagenciesx-
xanswerxunitsxthatxarexadvertisedxmustxbexcheckedxeveryxdayxforxavailability;xunitsxsimplyxli
stedxmustxbexcheckedxeveryxthreexdays
Placexofxbusinessx-xMainxofficexmustxdisplayx-
xanswerxlicensesxofxthexbrokerxandxthosexofxanyxassociates.xMustxbexprominentlyxdisplaye
dxinxthexmainxoffice.xNamesxofxassociatesxmustxbexprominentlyxdisplayedxinxthexbranchxoffi
ce
Trustxaccountx(escrowxaccount)x-
xanswerxearnestxmoneyxdepositsxmustxbexdepositedxwithinx5xbusinessxdaysx(ofxthexdatexon
xthexcheck)xinxanxescrowxaccountxwithxaxNJxfinancialxinstitution,xprohibitionxfromxcommingli
ngxfunds,xwrittenxreceiptsxmustxbexgivenxforxcashxdepositsx-
xcashxdepositsx$10,000xorxgreaterxmustxbexreportedxtoxthexIRSxandxpermanentxrecordsxhel
dxforxatxleastx6xyears
Arexcommissionsxnegotiablexbetweenxclientxandxbroker?x-xanswerxyes
Whoxcanxlicenseesxpreparexsalesxcontractsxfor?x-xanswerxonlyxforxone-xtoxfour-
familyxhomesxandxsinglexbuildingxlots
Whenxmustxaxbrokerxpayxmoniesxduextoxthexsalespersonx-
xanswerxwithinx10xdaysxafterxaxcommissionxisxreceived
Generalxagentx-xanswerxpropertyxmanager
Specialxagentx-xanswerxrealtors
Fiduciaryxresponsibilitiesx-xCarex-
xanswerxexpectedxtoxhavexexpertisexinxr/exmattersxgreaterxthanxthatxpossessedxbyxthexavgx
person
Fiduciaryxresponsibilitiesx-xObediencex-
xanswerxobligatedxtoxobeyxthexprincipal'sxlawfulxinstructionsxandxnotxrequiredxtoxobeyxunlaw
fulxorxunethicalxinstructions
, Fiduciaryxresponsibilitiesx-xaccountingx-
xanswerxobligatedxtoxsafeguardxandxaccountxforxallxmoneyxorxpropertyxentrustedxtoxtheirxpro
fessionalxcare.xDuplicatexoriginalsxgivenxtoxallxpartiesxandxkeepxcopiesxonxfilexforxsixxyears
Fiduciaryxresponsibilitiesx-xloyalty/confidentialityx-
xanswerxagentsxcannotxdisclosexsuchxinformationxasxthexprincipal'sxfinancialxconditionxorxa
nyxfactsxthatxmightxharmxthexprincipalsxbargainingxpositionxandxmustxnotxbuyxpropertyxliste
dxwithxthemxforxthemselvesxorxforxaccountsxinxwhichxtheyxhavexaxpersonalxinterestxwithoutxn
otifyingxthexprincipalxofxsuchxinterest,xsuchxaxdisclosurexmustxbexmadexinxwritingxasxpartxofxt
hexpurchasexcontract
Fiduciaryxresponsibilitiesx-xdisclosurex-
xanswerxarexrequiredxtoxpassxonxtoxthexprincipalxallxfactsxorxinformationxobtainedxthatxcouldx
affectxthexprincipal'sxbusinessxorxdecision
Fiduciaryxresponsibilitiesx-xgeneralxdutyxofxfairxdealingx-
xanswerxrequiredxtoxdealxfairlyxandxhonestlyxwithxallxparties
Broker'sxcompensationx-xanswerx“ready,xwilling,xandxable"xbuyerx-
xsellerxtechnicallyxowesxaxcommission
Procuringxcausex-
xanswerxpersonxwhoxthroughxaxseriesxofxuninterruptedxeventsxbroughtxaboutxthexsalex-
xisxduexcommission
Meetingxofxthexmindsx-
xanswerxsaidxtoxhavexhappenedxwhenxthexpartiesxarexinxagreementxonxthexprice,xdownxpay
ment,xandxfinancialxmethod
ConsumerxInformationxStatementx(CIS)x-
xanswerxagentsxarexrequiredxtoxfurnishxCISxbeforexanyxdiscussionxofxaxsellerxorxbuyerxmotiv
ationxorxfinancialxsituationxisxinitiatedxonxax1-4xfamilyxdwelling
Disclosurexissuesx-xMaterialxinformationx-
xanswerxaxphysicalxconditionxthatxaxreasonablexpersonxattachesximportancexto,xorxinformati
onxthatxthexagentxknowsxorxsuspectsxaxbuyerxwouldxwantxtoxknowxandxwouldxconsiderximpo
rtantxbeforexproceedingx-
xinxNJxaxpreviousxowner'sxsuicidexisxnotxconsideredxtoxbexaxmaterialxdisclosure
x x x
Whoxmustxbexlicensed?x-
xanswerxanyonexwhoxtakesxpartxinxaxrealxestatextransactionxinxNJxforxanotherxpersonxforxaxfe
e,xcommission,xorxotherxvaluablexconsideration
RealxEstatexCommissionx-
xanswerxComposedxbyx8xmembersxappointedxbyxthexgovernor,x5xr/exbrokersxwhoxhavexbee
nxlicensedxasxsuchxforxatxleastxtenxyears,x2xmembersxarexchosenxfromxthexgeneralxpublic,xa
ndxonexmemberxrepresentsxaxdepartmentxofxthexstatexgovernment
Classesxofxlicensesx-
xanswerxbroker,xsalespersonx(supervisingxbrokerxprovidesx"guidancexandxdirection),xbroke
r-
salespersonx(choosesxtoxworkxinxaxsalesxcapacity)xandxreferralxagentx(referxbusinessxtoxact
ivexagents,xcan'txactxasxanxagentxthemselves)
Realxestatexlicensesxnotxrequiredxforx-
xanswerxownersxhandlingxtheirxownxproperty,xattorneys,xexecutors,xtrustees,xreceivers,xad
ministrators,xlegalxguardians,xandxothersxhandlingxrealxestatexunderxthexorderxofxaxcourt,xIn
surancexcompanies,xbanksxandxtrustxcompanies.
Qualificationsxforxlicensurexsalespersonx-
xanswer18xorxolder,xhsxeducationxorxequivalent,xcompletexax75-hourxpre-
licensingxcourse,xdisclosexone'sxsocialxsecurityxnumberxforxchildxsupportxenforcementxpurp
oses,xlegalxresidencexinxthexUS,xpassxaxstatexexamxandxbexsponsoredxbyxaxlicensedxbroker
Qualificationsxforxlicensurexbrokerx-xanswerxsuccessfullyxcompletex150-hourxpre-
licensingxcourse
Noxlicensexwillxbexissuedxtoxanyonexconvictedxofxthisxwithinxthexprecedingxfivexyearsx-
xanswerxforgery
Guarantyxfundx-
xanswerxestablishedxtoxreimbursexmembersxforxthexpublicxwhoxsufferxmonetaryxlossxduextox
wrongdoing.xFundsxcomexfromxfeesxpaidxatxfirst-
licensexapplication.xThexmaxxclaimxisx$20,000
Intestatexpropertyx-
xanswerxregulationsxarexcontainedxinxrealxestatexsalesxfullxdisclosurexactxandxbureauxofxsub
,dividedxlandxsalesxcontrolxmustxapprovexcertainxnewxout-of-statexpropertiesx-
xbuyersxhavexupxtoxsevenxcalendarxdaysxtoxcancelxcontractsxforxthexpurchasexorxleasexofxsu
chxlands
Rentalxreferralxagenciesx-
xanswerxunitsxthatxarexadvertisedxmustxbexcheckedxeveryxdayxforxavailability;xunitsxsimplyxli
stedxmustxbexcheckedxeveryxthreexdays
Placexofxbusinessx-xMainxofficexmustxdisplayx-
xanswerxlicensesxofxthexbrokerxandxthosexofxanyxassociates.xMustxbexprominentlyxdisplaye
dxinxthexmainxoffice.xNamesxofxassociatesxmustxbexprominentlyxdisplayedxinxthexbranchxoffi
ce
Trustxaccountx(escrowxaccount)x-
xanswerxearnestxmoneyxdepositsxmustxbexdepositedxwithinx5xbusinessxdaysx(ofxthexdatexon
xthexcheck)xinxanxescrowxaccountxwithxaxNJxfinancialxinstitution,xprohibitionxfromxcommingli
ngxfunds,xwrittenxreceiptsxmustxbexgivenxforxcashxdepositsx-
xcashxdepositsx$10,000xorxgreaterxmustxbexreportedxtoxthexIRSxandxpermanentxrecordsxhel
dxforxatxleastx6xyears
Arexcommissionsxnegotiablexbetweenxclientxandxbroker?x-xanswerxyes
Whoxcanxlicenseesxpreparexsalesxcontractsxfor?x-xanswerxonlyxforxone-xtoxfour-
familyxhomesxandxsinglexbuildingxlots
Whenxmustxaxbrokerxpayxmoniesxduextoxthexsalespersonx-
xanswerxwithinx10xdaysxafterxaxcommissionxisxreceived
Generalxagentx-xanswerxpropertyxmanager
Specialxagentx-xanswerxrealtors
Fiduciaryxresponsibilitiesx-xCarex-
xanswerxexpectedxtoxhavexexpertisexinxr/exmattersxgreaterxthanxthatxpossessedxbyxthexavgx
person
Fiduciaryxresponsibilitiesx-xObediencex-
xanswerxobligatedxtoxobeyxthexprincipal'sxlawfulxinstructionsxandxnotxrequiredxtoxobeyxunlaw
fulxorxunethicalxinstructions
, Fiduciaryxresponsibilitiesx-xaccountingx-
xanswerxobligatedxtoxsafeguardxandxaccountxforxallxmoneyxorxpropertyxentrustedxtoxtheirxpro
fessionalxcare.xDuplicatexoriginalsxgivenxtoxallxpartiesxandxkeepxcopiesxonxfilexforxsixxyears
Fiduciaryxresponsibilitiesx-xloyalty/confidentialityx-
xanswerxagentsxcannotxdisclosexsuchxinformationxasxthexprincipal'sxfinancialxconditionxorxa
nyxfactsxthatxmightxharmxthexprincipalsxbargainingxpositionxandxmustxnotxbuyxpropertyxliste
dxwithxthemxforxthemselvesxorxforxaccountsxinxwhichxtheyxhavexaxpersonalxinterestxwithoutxn
otifyingxthexprincipalxofxsuchxinterest,xsuchxaxdisclosurexmustxbexmadexinxwritingxasxpartxofxt
hexpurchasexcontract
Fiduciaryxresponsibilitiesx-xdisclosurex-
xanswerxarexrequiredxtoxpassxonxtoxthexprincipalxallxfactsxorxinformationxobtainedxthatxcouldx
affectxthexprincipal'sxbusinessxorxdecision
Fiduciaryxresponsibilitiesx-xgeneralxdutyxofxfairxdealingx-
xanswerxrequiredxtoxdealxfairlyxandxhonestlyxwithxallxparties
Broker'sxcompensationx-xanswerx“ready,xwilling,xandxable"xbuyerx-
xsellerxtechnicallyxowesxaxcommission
Procuringxcausex-
xanswerxpersonxwhoxthroughxaxseriesxofxuninterruptedxeventsxbroughtxaboutxthexsalex-
xisxduexcommission
Meetingxofxthexmindsx-
xanswerxsaidxtoxhavexhappenedxwhenxthexpartiesxarexinxagreementxonxthexprice,xdownxpay
ment,xandxfinancialxmethod
ConsumerxInformationxStatementx(CIS)x-
xanswerxagentsxarexrequiredxtoxfurnishxCISxbeforexanyxdiscussionxofxaxsellerxorxbuyerxmotiv
ationxorxfinancialxsituationxisxinitiatedxonxax1-4xfamilyxdwelling
Disclosurexissuesx-xMaterialxinformationx-
xanswerxaxphysicalxconditionxthatxaxreasonablexpersonxattachesximportancexto,xorxinformati
onxthatxthexagentxknowsxorxsuspectsxaxbuyerxwouldxwantxtoxknowxandxwouldxconsiderximpo
rtantxbeforexproceedingx-
xinxNJxaxpreviousxowner'sxsuicidexisxnotxconsideredxtoxbexaxmaterialxdisclosure
