Chapter Three - NJ Licensing Laws

Question 1

Title 45 Chapter 15

Answer 1

The New Jersey Real Estate Licensing Act:

- Designed to license and regulate brokers and , salespersons and to establish a Real Estate Commission.

Question 2

NJAC 11:5

Answer 2

Rules & Regulations of the NJ Real Estate Commission

Question 3

The Real Estate Commission

Answer 3

• Operates as a division of the Department of Banking & Insurance.
• Statutory authority to supplement the license law with rules and regulations.
• Does NOT create laws.

Question 4

Branch Office

Answer 4

• A branch office license is required for each office.
• The branch office must be under the supervision of a licensed broker-salesperson.
• A duplicate license is required showing the name of the broker and the address of the branch office.

Question 5

When terminating a license the broker must:

Answer 5

• Advise salesperson in writing.
• Return license to the Commission within 5 days.
• Include a copy of the letter with the license sent to the Commission.

Question 6

Activities Requiring Licensure

Answer 6

Whenever a person is acting on behalf of a 3rd party.

• Collecting rent and managing income producing properties.
• Negotiating a loan to be secured by a mortgage.

Question 7

A broker candidate must:

Answer 7

Be a legal resident of the US but need not be a citizen.

Question 8

Temporary Broker’s License Requirements

Answer 8

• 3 years full time experience
• Application must be made within 30 days of broker’s death
• Valid for one year.

Question 9

License Records Maintenance

Answer 9

6 years

Question 10

Guarantee Fund

Answer 10

• Provides for recovery from the fund for any person who suffers a loss from participants in real estate transactions.
• $20,000 limitation on recovery for any one claim.

Question 11

Rebates

Answer 11

• Can only be provided by a broker.
• Must be in the form of a credit to the purchaser and reducing the amount of the commission payable to the broker or check made at the time of closing.

Question 12

Ads placed by a licensee must:

Answer 12

• Broker’s business name.
• Contain words such as broker, realtor, etc…
• Address of person placing ads.
• Free or discounted products and services are permitted.
• CMAs are permitted.
• Must include the municipality withing which the property is located.
• Always contain the name of the broker.

Question 13

Promptly

Answer 13

Defined a 5 business days.

Question 14

Attorney General’s Memorandum on the Law Against Discrimination

Answer 14

• Must be given to the owner when a listing is taken.

- Must refuse listing if owner indicates that he will not comply with the law.

Question 15

Permanent Transaction Records

Answer 15

• Transaction documents must be held for 6 years.

- Incomplete transaction records must be held for 6 months.

Question 16

Licensee Fines

Answer 16

• First violation - not more than $5,000.

- Second violation - not more than $10,000.

Question 17

Real Estate Full Disclosure Act

Answer 17

• Regulates the sale of out-of-state properties.
• The Bureau of Subdivided Land Sales Control administers the Act within the NJ Real Estate Commission.
• $250 - $50,000 fines

Question 18

OR/EE Rule

Answer 18

OR - gives things (seller)

EE - receives things (buyer)

Question 19

Mortgagor

Mortgagee

Answer 19

Borrower - gives pledge

Lender - receives pledge

Question 20

Title

Answer 20

= Ownership

Question 21

Mortgage

Answer 21

A pledge of real estate as collateral for a loan.

Question 22

Note

Answer 22

A promise to repay; evidence of a loan

Question 23

Status

Answer 23

• After a contract emerges from attorney review, and prior to closing, any ad of the property must include the words “under contract”.
• Broker may not indicate “sold” until after closing has taken place and title transferred.

Question 24

Attorney Review

Answer 24

3 days