(a) The
following paragraphs specify licensees' obligations to obtain written
confirmation of the intentions of, and to deliver copies of documents to,
parties to a real estate transaction.
1.
Where a licensee memorializes the terms of an offer or counter-offer on a
writing which will itself become an "instrument" as defined in (a)3 below, the
licensee shall deliver to the maker of such an offer or counter-offer a clear
copy of the executed offer or counter-offer immediately upon its being signed,
and initialed if necessary as provided in this section, by the maker of the
offer or counter-offer. Any addition, deletion, or other change in any such
offer or counter-offer shall be initialed by the party proposing such a
revision and, if accepted, by the other party to the transaction.
2. Where a licensee records the terms of an
offer or counter-offer on a writing which is not intended to be binding upon
either party, and which so states on its face, in the event that the licensee
secures the signature and/or initials of any party on such a writing, the
licensee shall provide to the signing and/or initialing party a clear copy of
the writing as signed and/or initialed by them.
3. As used in this subsection, the term
"instrument" means any complete and fully executed written contract of sale,
lease, option agreement, or other writing affecting an interest in real estate,
or any complete and fully executed addendum or amendment to any such contract,
lease, option agreement or writing. The term instrument as used in this
subsection does not include listing agreements and buyer brokerage
agreements.
4. Licensees shall
immediately deliver to all parties to any fully executed instrument a clear
copy with original signatures of any such fully executed instrument. Licensees
shall provide their clients with a fully executed copy of any sale or exclusive
sale or rental listing contract at the time of execution thereof.
5. Licensee-prepared revisions or additions
reflected on the instrument itself shall be initialed by all parties to the
transaction. Licensee-prepared revisions or additions to an instrument not
memorialized by changes on the instrument itself shall be reflected on
amendments or addenda to the instrument signed by all parties to the
transaction.
i. Licensees shall immediately
deliver to the party proposing a revision or addition to an instrument a clear
copy of any proposed revised instrument initialed by that party and a clear
copy of any proposed amendment or addendum signed by that party.
ii. All revisions, amendments and addenda to
any fully executed instrument which are prepared by licensees must comply with
New Jersey law as it pertains to the attorney review of contract and lease
documents prepared by real estate licensees.
6. This rule is to ensure prompt
communication of the executed evidence of a transaction to all interested
parties.
(b) No listing
agreement or contract for the sale of real property, or any interest therein,
shall contain a prescribed or predetermined fee, commission rate, or commission
amount; nor shall any such writing contain a commission clause or provision
which suggests (such as with a small blank space and percent sign) to a seller
that the commission is a prescribed rate or amount.
(c) The commission clause or provision in all
listing agreements for the sale of one to four family dwelling units or
interest therein, or in all contracts for such sale, if there is no listing
agreement, shall contain in print larger than the predominant size print in the
writing, the language: "As seller you have the right to individually reach an
agreement on any fee, commission, or other valuable consideration with any
broker. No fee, commission or other consideration has been fixed by any
governmental authority or by any trade association or multiple listing
service." Nothing herein is intended to prohibit an individual broker from
independently establishing a policy regarding the amount of fee, commission or
other value consideration to be charged in transaction by the broker.
(d) Upon request, the listing broker shall
advise the seller of the rate or amount of any commission split or
distribution.
(e) All listing
agreements of any licensed individual, partnership, firm or corporation which
provide for the listing of property with any real estate multiple listing
service operation shall specify the complete name of that listing
service.
(f) No licensed
individual, partnership, firm or corporation shall enter into a "net listing"
contract for the sale of real property, or any interest therein. A "net
listing" is defined as an agency agreement in which a prospective seller lists
real estate for sale with an authorization to a broker to sell at a specified
net dollar return to the seller, and which provides that the broker may retain
as commission the difference between the specified dollar return to the seller
and the actual sales price.
(g)
Licensees shall comply with the following provisions:
1. All contracts prepared by licensees for
the sale of residential real estate containing one to four dwelling units and
for the sale of vacant one-family lots in transactions in which the licensee
has a commission or fee interest shall contain, at the top of the first page
and in print larger than the predominant size print in the writing, the
following language:
THIS IS A LEGALLY BINDING CONTRACT THAT WILL BECOME FINAL
WITHIN THREE BUSINESS DAYS. DURING THIS PERIOD YOU MAY CHOOSE TO CONSULT AN
ATTORNEY WHO CAN REVIEW AND CANCEL THE CONTRACT. SEE SECTION ON ATTORNEY REVIEW
FOR DETAILS.
2. The
contract shall also contain the following language within the text of every
such contract.
ATTORNEY REVIEW:
1.
Study by Attorney
The Buyer or the Seller may choose to have an attorney study
this contract. If an attorney is consulted, the attorney must complete his or
her review of the contract within a three-day period. This contract will be
legally binding at the end of this three-day period unless an attorney for the
Buyer or Seller reviews and disapproves of the contract.
2. Counting the Time
You count the three days from the date of delivery of the
signed contract to the Buyer and the Seller. You do not count Saturdays,
Sundays or legal holidays. The Buyer and the Seller may agree in writing to
extend the three-day period for attorney review.
3. Notice of Disapproval
If an attorney for the Buyer or the Seller reviews and
disapproves of this contract, the attorney must notify the Broker(s) and the
other party named in this contract within the three-day period. Otherwise this
contract will be legally binding as written. The attorney must send the notice
of disapproval to the Broker(s) by certified mail, by telegram, or by
delivering it personally. The telegram or certified letter will be effective
upon sending. The personal delivery will be effective upon delivery to the
Broker's office. The attorney may but need not also inform the Broker(s) of any
suggested revisions in the contract that would make it satisfactory.
3. The contract shall
also contain the names and full addresses of all persons to whom a Notice of
Disapproval must be sent in order to be effective as provided in item three of
the Attorney Review Provision.
4.
All leases prepared by licensees for a term of one year or more for residential
dwelling units in transactions in which they have a commission or fee interest
shall, at the top of the first page and in print larger than the predominant
size print of the writing, contain the following language:
THIS IS A LEGALLY BINDING LEASE THAT WILL BECOME FINAL WITHIN
THREE BUSINESS DAYS. DURING THIS PERIOD YOU MAY CHOOSE TO CONSULT AN ATTORNEY
WHO CAN REVIEW AND CANCEL THE LEASE. SEE SECTION ON ATTORNEY REVIEW FOR
DETAILS.
5. The lease shall
also contain the following language within the text of every such lease.
ATTORNEY REVIEW:
1.
Study by Attorney
The Tenant or the Landlord may choose to have an attorney
study this lease. If an attorney is consulted, the attorney must complete his
or her review of the lease within a three-day period. This lease will be
legally binding at the end of this three-day period unless an attorney for the
Tenant or the Landlord reviews and disapproves of the lease.
2. Counting the Time
You count the three days from the date of delivery of the
signed lease to the Tenant and the Landlord. You do not count Saturdays,
Sundays or legal holidays. The Tenant and the Landlord may agree in writing to
extend the three-day period for attorney review.
3. Notice of Disapproval
If an attorney for the Tenant or the Landlord reviews and
disapproves of this lease, the attorney must notify the Broker(s) and the other
party named in the lease within the three-day period. Otherwise this lease will
be legally binding as written. The attorney must send the notice of disapproval
to the Broker(s) by certified mail, by telegram, or by delivering it
personally. The telegram or certified letter will be effective upon sending.
The personal delivery will be effective upon delivery to the Broker's office.
The attorney may but need not also inform the Broker(s) of any suggested
revisions in the lease that would make it satisfactory.
6. The lease shall also
contain the names and full addresses of all persons to whom a Notice of
Disapproval must be sent in order to be effective, as provided in item three of
the Attorney Review Provision.
7.
The failure of any licensee to include such language in any such contract of
sale or lease agreement prepared by the licensee shall be construed by the
Commission as engaging in the unauthorized practice of law and shall be
considered by the Commission as conduct which demonstrates the licensee's
unworthiness and incompetency, thereby subjecting the licensee to sanctions
pursuant to
N.J.S.A.
45:15-17(e).
Notes
N.J. Admin.
Code §
11:5-6.2
Amended by R.1977 d.84,
effective 3/10/1977.
See: 9 N.J.R. 91(d), 9 N.J.R. 178(a).
Amended by
R.1977 d.391, effective 10/19/1977.
See: 9 N.J.R. 344(a),
9 N.J.R. 536(a).
Amended by R.1979 d.461, effective
11/26/1979.
See:
10 N.J.R. 499(a), 12 N.J.R. 44(b).
Amended by R.1980 d.51,
effective 1/31/1980.
See: 12 N.J.R. 127(e).
Amended by R.1980 d.214,
effective 5/14/1980.
See: 12 N.J.R. 342(d).
Amended by R.1980 d.274,
effective 6/19/1980.
See: 12 N.J.R. 423(d).
Amended by R.1980 d.408,
effective 9/23/1980.
See: 12 N.J.R. 340(b), 12 N.J.R. 665(c).
(c)
substantially amended.
Amended by R.1980 d.409, effective
9/24/1980.
See: 12
N.J.R. 665(d).
(c) compliance date amended from November 1, 1981
to January 2, 1981.
Amended by R.1983 d.471, effective
11/7/1983.
See: 15
N.J.R. 1343(a), 15 N.J.R. 1865(c).
Time limits on compliance
deleted.
Amended by R.1987 d.159, effective
4/6/1987.
See: 18
N.J.R. 1677(a), 18 N.J.R. 2112(a), 19 N.J.R. 551(a).
Added (g).
Amended by R.1987 d.359, effective 9/8/1987.
See: 19 N.J.R. 503(b), 19
N.J.R. 1646(a).
Added (h) "Agreement to Honor".
Invalidity Annotation
N.J.A.C. 11:5-1.16(h) held invalid as an
intrusion upon the State Supreme Court's constitutional authority to regulate
the practice of law. Carmagnola v. Hann, 233 N.J.Super. 547 (App. Div. June 12,
1989), 559 A.2d 478.
Amended by R.1989 d.539, effective
10/16/1989.
See:
21 N.J.R. 2438(b), 21 N.J.R. 3299(a).
Subsection (h) deleted due
to Appellate Court decision ... N.J.Super. ..., Dkt. No. A-2211-88T2F
(App.Div.1989).
Amended by R.1993 d.10, effective
1/4/1993.
See: 24
N.J.R. 3485(a), 25 N.J.R. 179(a).
Text at (a) substantially
amended to specify licensees' obligations to parties in a real estate
transaction involving offers or counter-offers.
Petition for
Rulemaking.
See: 25 N.J.R. 4523(c), 26 N.J.R. 505(b).
Petition for Rulemaking.
See: 32 N.J.R. 850(a), 32 N.J.R. 1085(b).
Petition for Rulemaking.
See: 40 N.J.R. 3758(b), 40
N.J.R. 4361(a).
