(a) All
licensees are subject to and shall strictly comply with the laws of agency and
the principles governing fiduciary relationships. In accepting employment as an
agent, the licensee pledges himself to protect and promote, as he would his
own, the interests of the client or principal he has undertaken to represent;
this obligation of absolute fidelity to the client's or principal's interest is
primary but does not relieve the licensee from the obligation of dealing fairly
with all parties to the transaction.
(b) Every licensee shall make reasonable
effort to ascertain all material information concerning the physical condition
of every property for which he or she accepts an agency or which he or she is
retained to market as a transaction broker, and concerning the financial
qualifications of every person for whom he or she submits an offer to his or
her client or principal. Information about social conditions and psychological
impairments as defined in (d) below is not considered to be information which
concerns the physical condition of a property.
1. A reasonable effort to ascertain material
information shall include at least:
i.
Inquiries to the seller or seller's agent about any physical conditions that
may affect the property; and
ii. A
visual inspection of the property to determine if there are any readily
observable physical conditions affecting the property.
2. As used in this section, information is
"material" if a reasonable person would attach importance to its existence or
non-existence in deciding whether or how to proceed in the transaction, or if
the licensee knows or has reason to know that the recipient of the information
regards, or is likely to regard it as important in deciding whether or how to
proceed, although a reasonable person would not so regard
it.
(c) Licensees shall
disclose all information material to the physical condition of any property
which they know or which a reasonable effort to ascertain such information
would have revealed to their client or principal and when appropriate to any
other party to a transaction. Licensees shall also disclose any actual or
potential conflicts of interest that the licensee may reasonably anticipate.
1. With respect to off-site conditions which
may materially affect the value of the residential real estate, in all sales
contracts involving newly constructed residential real estate they prepare,
licensees shall include a statement as set forth below. By including this
statement in a contract of sale prepared by the licensee, the licensee shall be
deemed to have fulfilled his or her disclosure obligations under (c) above with
respect to such off-site conditions. The statement shall be in print as large
as the predominant size print in the document and shall read as follows:
"NOTIFICATION REGARDING OFF-SITE CONDITIONS
Pursuant to the New Residential Construction Off-Site
Conditions Disclosure Act, P.L. 1995, c.253 (C.
N.J.S.A.
46:3C-1 et seq.), sellers of newly
constructed residential real estate are required to notify purchasers of the
availability of lists disclosing the existence and location of off-site
conditions which may affect the value of the residential real estate being
sold. The lists are to be made available by the municipal clerk of the
municipality within which the residential real estate is located and in other
municipalities which are within one-half mile of the residential real estate.
The address(es) and telephone number(s) of the municipalities relevant to this
project and the appropriate municipal offices where the lists are made
available are listed below. Purchasers are encouraged to exercise all due
diligence in order to obtain any additional or more recent information that
they believe may be relevant to their decision to purchase the residential real
estate. Purchasers are also encouraged to undertake an independent examination
of the general area within which the residential real estate is located in
order to become familiar with any and all conditions which may affect the value
of the residential real estate.
The purchaser has five (5) business days from the date the
contract is executed by the purchaser and the seller to send notice of
cancellation of the contract to the seller. The notice of cancellation shall be
sent by certified mail. The cancellation will be effective upon the notice of
cancellation being mailed. If the purchaser does not send a notice of
cancellation to the seller in the time or manner described above, the purchaser
will lose the right to cancel the contract as provided in this notice.
Municipality __________________________________
Address ______________________________________
Telephone Number ____________________________ "
The statement shall either be included in the text of the
contract itself or attached to the contract as an Addendum.
2. In all residential real estate sale
contracts they prepare except contracts for newly constructed residential real
estate, licensees shall include a statement as set forth below. The statement
shall be in print as large as the predominant size print in the document and
shall read as follows:
"NOTICE ON OFF-SITE CONDITIONS
Pursuant to the New Residential Construction Off-site
Conditions Disclosure Act, P.L. 1995, c.253 the clerks of
municipalities in New Jersey maintain lists of off-site conditions which may
affect the value of residential properties in the vicinity of the off-site
condition. Purchasers may examine the lists and are encouraged to independently
investigate the area surrounding this property in order to become familiar with
any off-site conditions which may affect the value of the property. In cases
where a property is located near the border of a municipality, purchasers may
wish to also examine the list maintained by the neighboring
municipality."
The statement shall either be included in the text of the
contract itself or attached to the contract as an Addendum.
i. Licensees who possess actual knowledge of
an off-site condition which may materially affect the value of residential real
estate other than newly constructed properties shall disclose that information
to prospective purchasers of such residential real estate affected by the
condition. That disclosure shall be made prior to the signing of the contract
by a prospective purchaser.
ii. In
cases where the licensee did not possess actual knowledge of the presence of an
off-site condition which might materially affect the value of the residential
real estate, by virtue of including the foregoing statement in a contract of
sale prepared by him or her, the licensee shall be deemed to have fulfilled his
or her disclosure obligations under (c) above with respect to such off-site
conditions.
3. As used in
this subsection, the following words and terms shall have the following
meanings:
i. "Newly constructed" means any
dwelling unit not previously occupied, excluding dwelling units constructed
solely for lease and units governed by the National Manufactured Housing
Construction and Safety Standards Act of 1974,
42
U.S.C. §§
5402 et seq.
ii. "Off-site conditions" refers to the
following conditions as set forth in the New Residential Construction Off-Site
Conditions Disclosure Act, N.J.S.A. 46:3C-3 (
P.L. 1995 c. 253), or as amended:
(1) The latest Department of Environmental
Protection listing of sites included on the National Priorities List pursuant
to the "Comprehensive Environmental Response, Compensation and Liability Act of
1980,"42 U.S.C. §§
9601 et
seq.;
(2) The latest sites known to
and confirmed by the Department of Environmental Protection and included on the
New Jersey master list of known hazardous discharge sites, prepared pursuant to
P.L.
1982, c. 202 (
N.J.S.A.
58:10-23.15 et seq.);
(3) Overhead electric utility transmission
lines conducting 240,000 volts or more;
(4) Electrical transformer
substations;
(5) Underground gas
transmission lines as defined in
49
C.F.R.
192.3;
(6) Sewer pump stations of a capacity equal
to, or in excess of 0.5 million gallons per day and sewer trunk lines in excess
of 15 inches in diameter;
(7)
Sanitary landfill facilities as defined pursuant to
section
3 of
P.L.
1970, c.39 (
N.J.S.A.
13:1E-3);
(8) Public wastewater treatment facilities;
and
(9) Airport safety zones as
defined pursuant to
section 3 of
P.L.
1983, c.260 (
N.J.S.A.
6:1-82).
iii. "Residential real estate" means a
property or structure or both which will serve as a residence for the
purchaser.
(d)
Information about social conditions or psychological impairments of a property
is not considered information which affects the physical condition of a
property. Subject to (d)3 below, licensees are not required by (c) above to
disclose such information.
1. As used in this
section, the term "social conditions" includes, but is not limited to,
neighborhood conditions such as barking dogs, boisterous neighbors, and other
conditions which do not impact upon or adversely affect the physical condition
of the property.
2. As used in this
section, the term "psychological impairments" includes, but is not limited to,
a murder or suicide which occurred on a property, or a property purportedly
being haunted.
3. Except as
provided below, upon receipt of an inquiry from a prospective purchaser or
tenant about whether a particular property may be affected by a social
condition or psychological impairment, licensees shall provide whatever
information they know about the social conditions or psychological impairments
that might affect the property.
i. In
accordance with
N.J.S.A.
10:5-1 et seq. (the "Law Against
Discrimination"), licensees shall make no inquiry and provide no information on
the racial composition of, or the presence of a group home in, a neighborhood.
In response to requests for such information, licensees shall inform the
persons making the inquiry that they may conduct their own investigation. This
paragraph does not apply to the owner of a multiple dwelling or his agent to
the extent that such inquiries are necessary for compliance with N.J.A.C.
13:10.
ii. In accordance with
N.J.S.A.
2C:7-6 through 11 ("Megan's Law") and the
guidelines promulgated thereunder, licensees shall make no inquiry about and
provide no information on notifications from a county prosecutor issued
pursuant to that law. In response to requests for such information, licensees
shall inform the person making the inquiry that information about registered
sex offenders is maintained by the county
prosecutor.
(e)
In all contracts and leases on residential real estate they prepare, licensees
shall include the following statement in print as large as the predominant size
print in the document:
MEGAN'S LAW STATEMENT--Under New Jersey law, the county
prosecutor determines whether and how to provide notice of the presence of
convicted sex offenders in an area.
In their professional capacity, real estate licensees are not
entitled to notification by the county prosecutor under Megan's Law and are
unable to obtain such information for you. Upon closing the county prosecutor
may be contacted for such further information as may be disclosable to
you.
(f) Unless directed
not to do so in writing by an owner as provided herein, every licensee shall
fully cooperate with all other New Jersey licensees utilizing cooperation
arrangements which shall protect and promote the interests of the licensee's
client or principal. Collusion and discrimination with respect to commission
rates and splits are prohibited as provided in
N.J.A.C.
11:5-7.5 and 7.6.
1. The obligation to fully cooperate with all
other licensees includes the requirements that listing brokers:
i. Notify any Multiple Listing System to
which a listing is to be submitted of having acquired the listing within 48
hours of the effective date of the listing;
ii. Transmit to their principal(s) all
written offers on their listings submitted by licensees with other firms within
24 hours of receipt of the written offer by their firm; and
iii. Place no unreasonable restrictions upon
the showing of properties listed with them to prospective purchasers who are
working through cooperating brokers. A requirement that all appointments for
showings must be made through the listing broker's office is not considered an
unreasonable restriction upon showings.
2. All requirements imposed by the obligation
to fully cooperate shall be complied with on all listings unless the client or
principal, with full knowledge of all relevant facts, expressly relieves the
listing broker from one or more of those requirements in writing. Such a
writing shall be signed by the owner and made an attachment to the listing
agreement. Such a writing shall be made available for inspection by other
brokers upon request.
3. All
written listing agreements prepared by licensees shall include a provision as
set forth below, which provision shall be in print larger than the predominant
size print in the agreement. The provision may be included within the body of
the listing agreement or attached to the listing as an addendum to it. Where
the provision is made an addendum to the listing agreement it shall be signed
by the owner at the same time that the owner signs the listing agreement. Prior
to securing the owner's signature on the listing agreement, the listing broker
shall specify the complete formula for determining the commission split in the
indicated location in the provision.
COMMISSION SPLITS
LISTING BROKERS USUALLY COOPERATE WITH OTHER BROKERAGE FIRMS
BY SHARING INFORMATION ABOUT THEIR LISTINGS AND OFFERING TO PAY PART OF THEIR
COMMISSION TO THE FIRM THAT PRODUCES A BUYER. THIS IS GENERALLY REFERRED TO AS
THE "COMMISSION SPLIT."
SOME LISTING BROKERS OFFER TO PAY COMMISSION SPLITS OF A
PORTION OF THE GROSS COMMISSION, USUALLY EXPRESSED AS A PERCENTAGE OF THE
SELLING PRICE, LESS A SIGNIFICANT DOLLAR AMOUNT. OTHER LISTING BROKERS OFFER A
PORTION OF THE GROSS COMMISSION LESS ONLY A MINIMAL LISTING FEE OR LESS
ZERO.
THE AMOUNT OF COMMISSION SPLIT YOUR BROKER OFFERS CAN AFFECT
THE EXTENT TO WHICH YOUR PROPERTY IS EXPOSED TO PROSPECTIVE BUYERS WORKING WITH
LICENSEES FROM OTHER BROKERAGE FIRMS.
ON THIS LISTING, THE BROKER IS OFFERING A COMMISSION SPLIT OF
_______ MINUS _______ TO POTENTIAL COOPERATING BROKERS.
IF YOU FEEL THAT THIS MAY RESULT IN YOUR PROPERTY RECEIVING
LESS THAN MAXIMUM EXPOSURE TO BUYERS, YOU SHOULD DISCUSS THOSE CONCERNS WITH
THE LISTING SALESPERSON OR HIS/HER SUPERVISING BROKER.
BY SIGNING THIS LISTING AGREEMENT THE OWNER(S) ACKNOWLEDGE
HAVING READ THIS STATEMENT ON COMMISSION SPLITS.
4. Should the client or principal direct the
listing broker not to cooperate at all with all other licensees, evidence of
this intent shall be in writing in the form of a WAIVER OF BROKER COOPERATION
as set forth below and signed by the client or principal. Copies of this WAIVER
OF BROKER COOPERATION and the listing agreement to which it relates shall be
provided to the client or principal and to their authorized representative by
the broker. This waiver shall become a part of the listing agreement at the
time it is signed, and shall be made available for inspection by other brokers
upon request. However, no direction or inducement from the client or principal
shall relieve the listing broker of his responsibility of dealing fairly and
exercising integrity with all other licensees.
WAIVER OF BROKER COOPERATION
I UNDERSTAND THAT COOPERATION AMONGST BROKERS PRODUCES WIDER
EXPOSURE OF MY PROPERTY AND MAY RESULT IN IT BEING SOLD OR LEASED SOONER AND AT
A HIGHER PRICE THAN WOULD BE THE CASE WERE MY BROKER NOT TO COOPERATE WITH
OTHER BROKERS. I FURTHER UNDERSTAND THAT WHEN MY BROKER COOPERATES WITH OTHER
BROKERS, I CAN STILL HAVE THE ARRANGEMENTS FOR THE SHOWING OF THE PROPERTY AND
ALL NEGOTIATIONS WITH ME OR MY ATTORNEY MADE ONLY THROUGH MY LISTING BROKER'S
OFFICE, SHOULD I SO DESIRE.
However, despite my awareness of these factors, I direct that
this property is to be marketed only through the efforts of the listing broker.
This listing is not to be published in any multiple listing service. I will
only consider offers on this property which are obtained by, and I will only
allow showings of this property to be conducted by the listing broker or his or
her duly authorized representatives. THE LISTING BROKER IS HEREBY DIRECTED NOT
TO COOPERATE WITH ANY OTHER BROKER.
By signing below, the parties hereto confirm that no pressure
or undue influence has been exerted upon the owners as to how this property is
to be marketed by the Listing Broker.
The owner(s) further confirm receipt of fully executed copies
of the listing agreement on this property and of this Waiver of Broker
Cooperation form.
Dated: __________ Owner _____________________
Owner _____________________
Listing Broker _____________________
By: Authorized Licensee or Broker
____________________
(g) If any offer on any real property or
interest therein is made orally, the licensee shall advise the offeror that he
is not obligated to present to the owner or his authorized representative any
offer unless the offer is in writing. Unless a writing containing or confirming
the terms of the listing agreement otherwise provides, the licensee shall
transmit every written offer on any real property or interest therein presented
to or obtained by the licensee during the term of the listing to the owner or
his authorized representative within 24 hours of receipt of the written offer
by their firm. For the purposes of this section, the term of a listing shall be
deemed to expire either on the termination date established in the listing
agreement, or upon the closing of a pending sale or lease. If any acceptance of
an offer is given orally, the licensee shall secure the acceptance in writing
within 24 hours.
(h) Back-up offers
shall be handled as follows:
1. As used in
this subsection, the term "back-up offer" shall mean a written and signed offer
to purchase or lease an interest in real estate which is received by a licensee
at a time when a previously executed contract or lease pertaining to the same
interest in real estate is pending and in effect, having survived attorney
review if it was subject to such review. Offers obtained while a previously
executed contract or lease is still pending attorney review are not considered
back-up offers and must be presented as provided in (g) above.
2. Whenever a licensee transmits a back-up
offer to an owner, the licensee shall advise the owner in writing to consult an
attorney before taking any action on the back-up offer, and shall retain a copy
of such written notice as a business record in accordance with
N.J.A.C.
11:5-5.4.
3. Whenever a licensee receives a back-up
offer, the licensee shall notify the offeror in writing that the property to
which the offer pertains is the subject of a pending contract of sale or lease
and, in the event that the licensee receiving the back-up offer is not licensed
with the listing broker, a copy of that notice shall be delivered to the
listing broker at the time the offer is presented. The said notice shall not
disclose the price and terms of the pending contract or lease. A copy of such
written notice shall be retained by the licensee as a business record in
accordance with
N.J.A.C.
11:5-5.4.
(i) It shall be the duty of a licensee to
recommend that legal counsel be obtained whenever the interests of any party to
a transaction seem to require it.
(j) At the time of the taking of any listing
of residential property, a licensee shall furnish to the owner a copy of a
summary of the New Jersey Law Against Discrimination
N.J.S.A.
10:5-1 et seq. which summary shall have been
prepared and furnished by the Attorney General of the State of New Jersey,
shall state the provisions of the Law Against Discrimination, and shall state
which properties are covered by this law and which properties are exempt from
this law. Should the owner profess an unwillingness to abide by or an intention
to violate this law then the licensee shall not accept these
listings.
(k) No licensee shall
deny real estate brokerage services to any person for reasons of race, creed,
color, national origin, ancestry, marital status, civil union status, domestic
partnership status, familial status, sex, gender identity or expression,
affectional or sexual orientation, disability, nationality, or source of lawful
income used for rental or mortgage payments, and no licensee shall participate
or otherwise be a party to any plan, scheme or agreement to discriminate
against any person on the basis of race, creed, color, national origin,
ancestry, marital status, civil union status, domestic partnership status,
familial status, sex, gender identity or expression, affectional or sexual
orientation, disability, nationality, or source of lawful income used for
rental or mortgage payments. For the purposes of this subsection, the term
"disability" shall have the same meaning as the definition of "disability"
codified at N.J.S.A. 10:5-5q.
(l)
Licensees may engage in brokerage activity in transactions involving the resale
of mobile and manufactured homes as provided at
N.J.S.A.
39:10-19. Licensees who do so shall be
familiar with all laws applicable to such transactions. These laws include
N.J.S.A.
39:1-1 et seq., as it applies to the resale
of and the transfer of the titles to such motor vehicle units, N.J.S.A. 46:8C-
2 et seq., as it applies to the resale of such units when situated in Mobile
Home Parks,
N.J.S.A.
17:16C-1 et seq., as it applies to the
financing of purchases of personal property, and New Jersey's Truth in Renting
Act, N.J.S.A. 46:8-43 et seq. Licensees
who, when involved in transactions of this type, evidence a lack of familiarity
with these laws either through acts of omission or commission shall be subject
to sanctions by the Commission for having engaged in conduct demonstrating
incompetency, in violation of
N.J.S.A.
45:15-17(e).
Notes
N.J. Admin.
Code §
11:5-6.4
As amended, R.1975
d.260, effective 8/28/1975.
See: 7 N.J.R. 333(d), 7 N.J.R. 469(c).
As amended,
R.1976 d.10, effective 1/13/1976.
See: 7 N.J.R. 567(e), 8
N.J.R. 70(e).
As amended, R.1979 d.461, effective
11/26/1979.
See:
10 N.J.R. 499(a), 12 N.J.R. 44(b).
As amended, R.1983 d.471,
effective 11/7/1983.
See: 15 N.J.R. 1343(a), 15 N.J.R. 1865(c).
Statutory
cite added.
Amended by R.1988 d.69, effective
2/16/1988 (operative March 1,
1988).
See: 19 N.J.R. 1621(a), 20 N.J.R. 402(a).
Amended to clearly define full cooperation.
Amended by R.1988
d.412, effective 9/6/1988.
See: 20 N.J.R. 725(a), 20 N.J.R. 2295(b).
Added text
to (g) that is favorable to handicapped individuals.
Amended by
R.1993 d.365, effective 7/19/1993.
See: 24 N.J.R. 3486(a),
25 N.J.R. 3219(a).
Amended by R.1994 d.266, effective
6/20/1994 (operative July 1,
1994).
See: 26 N.J.R. 729(a), 26 N.J.R. 1194(a), 26 N.J.R.
1222(a), 26 N.J.R. 2581(b).
Amended by R.1997 d.27, effective
1/21/1997.
See: 28
N.J.R. 3065(a), 29 N.J.R. 366(a).
Added (i).
Amended
by R.1997 d.275, effective 7/7/1997.
See: 29 N.J.R. 300(a), 29
N.J.R. 2849(a).
Substantially amended (b); recodified former
second sentence of (b) as (c) and amended; added (c)1 through 3, (d) and (e);
and recodified former (c) through (i) as (f) through ( l).
Administrative correction.
See: 29 N.J.R. 3260(a).
In
(c)1, in the second paragraph, inserted "shall be sent by certified mail. The
cancellation".
Amended by R.1998 d.497, effective
10/5/1998.
See: 30
N.J.R. 2333(a), 30 N.J.R. 3646(a).
In (f) and (h), changed
N.J.A.C. references.
Amended by R.2001 d.237, effective
7/16/2001.
See: 32
N.J.R. 2207(a), 33 N.J.R. 2533(a).
Rewrote (f) and (g).
Amended by R.2004 d.130, effective 4/5/2004.
See: 35 N.J.R. 4812(a),
36 N.J.R. 1780(a).
In (g), deleted "forthwith" following "shall
secure" and inserted "within 24 hours" following "in writing".
Amended by R.2009 d.287, effective 9/21/2009.
See: 41 N.J.R. 1381(a),
41 N.J.R. 3440(a).
Section was "Obligation of licensees to public
and to each other". Rewrote (k).
Amended by
55
N.J.R. 302(a), effective
2/21/2023
