Question 1
Under the New Jersey Law Against Discrimination (LAD), which of the following actions by a residential landlord is MOST clearly prohibited with respect to prospective tenants?
- A. Requiring all applicants to submit a credit report from a nationally recognized reporting agency.
- B. Refusing to rent to a family with minor children in a building where the landlord occupies one unit of a two-unit structure.
- C. Declining to rent to an applicant who cannot demonstrate lawful ability to enter into a contract.
- D. Refusing to rent to a prospective tenant solely because the tenant has a housing choice voucher (Section 8). ✓ Answer
Explanation: The New Jersey LAD (N.J.S.A. 10:5-1 et seq.) prohibits discrimination based on 'source of lawful income,' which courts and the New Jersey Division on Civil Rights have interpreted to include Section 8 Housing Choice Vouchers. Refusing to rent solely on that basis is unlawful under New Jersey law, a protection not found in the federal Fair Housing Act. The two-unit owner-occupied exemption provides a limited exception to familial status claims, not to source-of-income discrimination.
Question 2
Under New Jersey's Rent Security Deposit Law (N.J.S.A. 46:8-19 et seq.), if a landlord invests a tenant's security deposit in an interest-bearing account, what must the landlord do with the interest earned on that deposit?
- A. Retain the interest as additional compensation for administering the security deposit account.
- B. Credit the interest annually to the tenant or pay it to the tenant in cash at the tenant's request. ✓ Answer
- C. Remit the interest annually to the New Jersey Department of Community Affairs.
- D. Apply the interest automatically toward the tenant's next month's rent.
Explanation: N.J.S.A. 46:8-19 requires that interest earned on a security deposit held in an interest-bearing account be credited annually to the tenant's account or, if the tenant requests, paid in cash. The landlord may not retain the interest as personal income, remit it to a state agency, or apply it to rent without the tenant's direction.
Question 3
A residential tenant in New Jersey is constructively evicted because the landlord has allowed essential services — heat and hot water — to fail for an extended period. Under New Jersey common law and the implied warranty of habitability, what is the tenant's MOST legally significant remedy?
- A. The tenant may withhold rent in full and the landlord has no right to pursue eviction until services are restored.
- B. The tenant may vacate the premises, terminate the lease, and sue for damages without being liable for future rent. ✓ Answer
- C. The tenant must first obtain a court order declaring constructive eviction before vacating.
- D. The tenant's only remedy is to file a complaint with the Bureau of Housing Inspection.
Explanation: Under the doctrine of constructive eviction recognized in New Jersey courts, when a landlord's failure to maintain essential services renders the premises uninhabitable, the tenant may vacate, treat the lease as terminated, and pursue damages for breach of the implied warranty of habitability — without continuing liability for rent. The tenant is not required to obtain a court order before vacating and is not limited solely to administrative remedies.
Question 4
Under New Jersey's Hotel and Multiple Dwelling Law (N.J.S.A. 55:13A-1 et seq.), which state agency is directly responsible for conducting inspections of multiple dwellings and issuing certificates of inspection?
- A. New Jersey Real Estate Commission (NJREC)
- B. New Jersey Division of Consumer Affairs
- C. Bureau of Housing Inspection within the Department of Community Affairs ✓ Answer
- D. New Jersey Division of Fire Safety
Explanation: The Bureau of Housing Inspection (BHI), a unit within the New Jersey Department of Community Affairs (DCA), is the agency charged with inspecting multiple dwellings under the Hotel and Multiple Dwelling Law and issuing certificates of inspection when properties comply with minimum habitability standards.
Question 5
Under the New Jersey Anti-Eviction Act, a landlord who wishes to demolish or substantially alter a residential building so as to make the units uninhabitable must provide the tenant with written notice of how much time before the proposed displacement?
- A. 30 days
- B. 60 days
- C. 3 months ✓ Answer
- D. 18 months
Explanation: Under the New Jersey Anti-Eviction Act notice provisions, when a landlord seeks to evict because the premises will be permanently retired, demolished, or substantially altered so that the unit becomes uninhabitable, the tenant must receive lengthy advance written notice, commonly tested as 18 months before the proposed displacement. Three months is not the correct notice period for this demolition/substantial alteration displacement ground.
Question 6
A New Jersey broker is holding a $20,000 earnest money deposit in trust. The buyer's attorney sends a written demand for return of the deposit, citing the mortgage contingency. The seller's attorney disputes the demand and claims the buyer waived the contingency. The broker has not received a mutual release or court order. Under NJREC rules, how long may the broker permissibly continue to hold the funds in trust while the dispute is unresolved?
- A. No longer than 30 days after receiving the first written demand
- B. No longer than 90 days, after which the broker must file for interpleader
- C. The broker may hold the funds indefinitely in trust while awaiting mutual written consent or a court order, as long as the account is properly maintained ✓ Answer
- D. The broker must release the funds to the seller after 60 days of dispute without resolution
Explanation: Under New Jersey law and NJREC regulations, a broker who faces conflicting claims over trust funds is legally protected — and required — to retain the funds in the trust account until either all parties provide mutual written consent to disburse or a court order is obtained directing disbursement. There is no mandatory deadline by which the broker must force interpleader; the broker may hold the funds as long as necessary while the dispute is legitimately pending, provided the account remains properly maintained and reconciled.