45:15-16.27 & 45:15-16.28 Real Estate Sales Full Disclosure Act – Title and Definitions +20New Jersey · Real Estate · English

'Subdivision' and 'subdivided lands' mean any land situated OUTSIDE the State of New Jersey, whether contiguous or not, where one or more lots/interests are offered as part of a common promotional plan of advertising and sale. It expressly includes condominiums (Condominium Act), and also homeowners associations, housing cooperatives, and community trusts or other trust devices. A 'subdivider'/'developer' is any owner of subdivided lands or its agent offering the lands for disposition.

• ✓Subdivided lands under this act are located OUTSIDE the State of New Jersey and offered under a common promotional plan
• ✓The definition expressly includes condominiums, homeowners associations, housing cooperatives, and community trusts

'Advertising' means publishing information offering subdivided-land interests for sale or inducing purchase, including land sales contracts, photos, drawings, or artist's representations of physical conditions/facilities. It reaches newspapers, radio/TV broadcasts, printed matter of 10+ copies, billboards, model homes, electronic offers, and materials inducing prospects to visit (e.g., vacation certificates requiring a sales presentation). It excludes stockholder communications, prospectuses/property reports required by other agencies, and communications to existing purchasers unless directed to sale of additional lands.

• ✓Advertising includes duplicated printed matter producing 10 or more copies, billboards, model home displays, and vacation-certificate inducement materials
• ✓Advertising excludes stockholder communications, government-required prospectuses/property reports, and communications to existing purchasers except for additional-land sales

Blanket encumbrance = a trust deed, mortgage, judgment, lien, option/contract to sell, or trust agreement affecting a subdivision or more than one lot, excluding liens arising from public tax assessments. Common promotional plan = an offer to dispose of lots by a single person/group acting in concert where lots are contiguous or advertised as a common entity. Disposition = a sale, lease, assignment, lottery award, or transaction concerning a subdivision undertaken for gain or profit. Offer = any inducement/solicitation for gain or profit. Broker/salesperson includes anyone acting as an agent/employee of a subdivider.

• ✓A blanket encumbrance affects more than one lot but excludes liens from public tax assessments
• ✓Disposition and offer both require that the transaction be undertaken for gain or profit

This body of law is known and may be cited as the 'Real Estate Sales Full Disclosure Act' (L.1989, c.239). It governs the offering and disposition of subdivided lands to New Jersey residents.

• ✓The act may be cited as the 'Real Estate Sales Full Disclosure Act'
• ✓It was enacted by L.1989, c.239

When different licensees at the same firm are designated to represent buyer and seller respectively, each is a designated agent who solely represents their principal. Designated agents are NOT dual agents and owe fiduciary duties solely to their respective principals. A written designated agency agreement with informed written consent of each party is required.

• ✓Designated agents are NOT dual agents
• ✓Each designated agent owes fiduciary duties solely to their own principal
• ✓Requires a written designated agency agreement with informed written consent of each party
• ✓May be incorporated into the brokerage services agreement

Notwithstanding R.S.45:15-17(i), a designated agent (broker-salesperson or salesperson) may receive compensation through the firm from either or both parties, provided sources and amounts are disclosed in writing to both.

• ✓May receive compensation from either or both parties
• ✓Sources and amounts must be disclosed in writing to both parties

When a transferring licensee asks their broker to hand them the license, the terminating broker must sign and date the rear, complete and retain the termination confirmation section, and within five business days either mail the completed termination confirmation to the Commission (copy to licensee) or process the termination online, sending a copy to the licensee's last known address.

• ✓Terminating broker must sign and date the rear of the license before delivery
• ✓Termination confirmation section must be completed, signed, and retained by the broker
• ✓Within 5 business days, the broker must mail or process online the termination and send a copy to the licensee's last known residence address

Before a transferring person begins work, the new employing broker must enter the employment effective date, sign as new employing broker, detach the temporary stub, and either mail the license to the Commission with the transfer fee (in an acceptable form) or process the transfer online paying by electronic check or credit card.

• ✓New broker must enter employment effective date and sign the license before the licensee starts work
• ✓New broker must detach the temporary license stub and keep it with other licenses
• ✓Transfer fee must be paid by certified/cashier's check, money order, broker's business account check, or (online) electronic check/credit card

When a broker terminates or a licensee resigns, written notice specifying the effective date must be provided. Within five business days, if the licensee did not request personal delivery, the broker must deliver/mail the license to the Commission or process the termination online, and contemporaneously send the licensee written notice at their last known residence address.

• ✓Written notice specifying the effective date of termination or resignation is required
• ✓Within 5 business days the broker must return the license or process the termination online
• ✓The broker must contemporaneously send the licensee written notice at their last known residence address

Only salesperson (referral), salesperson, or broker-salesperson licenses may be transferred/terminated online. All must be completed by an active broker of record or employing broker, who may not process on their own license. Online transfer requires prior termination by the supervising broker. Brokers must keep termination and transfer records for six years.

• ✓Only salesperson (referral), salesperson, or broker-salesperson licenses can be transferred/terminated online
• ✓Must be completed by an active broker of record or employing broker
• ✓A broker may not process an online termination/transfer on their own license
• ✓Termination and transfer records must be maintained for six years

To expedite licensees engaging in real estate, when a license certificate cannot be issued without delay after all conditions are met, the Commission may issue a certificate of authority in the form of a letter to serve as a temporary license for a limited period.

• ✓A certificate of authority (letter) may serve as a temporary license for a limited period
• ✓Issued when the actual license certificate cannot be issued without delay after all conditions are fulfilled

The article does not apply to bona fide owners/lessors performing acts on their own property, nor to attorneys at law, receivers, trustees in bankruptcy, executors, administrators, persons selling under court order or deed of trust, state/federal banks, savings banks, trust companies located within the state, or insurance companies incorporated under state insurance laws.

• ✓Bona fide owners and lessors acting on their own property are exempt
• ✓Attorneys, receivers, trustees, executors, and administrators are exempt
• ✓Banks, trust companies, and insurance companies are exempt from the licensing requirements

When an instructor license of any partner, officer, director, or controlling-interest owner is revoked, the commission must revoke the school's license unless divestiture/severance conditions are met within a set time. For partnerships the partner's connection and interest must be severed; for corporations the person must be terminated and controlling interest divested; for limited partnerships general partner interests must be divested. 'Controlling interest' means 5% or more of the equity/ownership.

• ✓Instructor license revocation of an owner triggers school license revocation unless divestiture occurs
• ✓'Controlling interest' means 5% or more of equity of a corporation or of partnership ownership
• ✓Divestiture/severance must occur within the commission's fixed time period

Licensees must have a copy of their license in their possession at all times when engaged in the real estate business. A licensee may carry a physical copy or maintain a digital copy on a phone, tablet, laptop, or other electronic device. Licensees may print or download their license from the Commission's online licensing system at www.reconline.nj.gov. This new section became effective January 20, 2026.

• ✓Licensees must possess a copy of their license at all times while doing real estate business
• ✓A physical or digital copy (on any electronic device) satisfies the requirement
• ✓Licenses may be printed or downloaded from the Commission's online system

Unless exempt, no person may offer, dispose, or participate in disposing of subdivided lands or interests except in accordance with this act. No person may dispose of any interest unless a current public offering statement, disclosing all information required by section 12, is delivered to the purchaser and the purchaser is given a reasonable opportunity to examine it before the disposition.

• ✓Offering or disposing of subdivided lands is prohibited unless in accordance with the act (or exempt)
• ✓A current public offering statement must be delivered and the purchaser given a reasonable opportunity to review it before disposition

The Bureau of Subdivided Land Sales Control, within the Division of the New Jersey Real Estate Commission in the Department of Insurance (established under P.L.1975, c.235), shall continue to operate under this act.

• ✓The Bureau of Subdivided Land Sales Control operates within the NJREC in the Department of Insurance
• ✓It continues under authority established by P.L.1975, c.235

A transaction broker does not act as an agent, does not represent any party, does not promote one party's interest over the other, and is not required to keep information confidential. Duties include honest and competent treatment of all parties, presenting all offers, keeping parties informed, and facilitating closing without helping one party gain advantage.

• ✓A transaction broker does not represent or advocate for any party
• ✓Not required to keep any information confidential
• ✓Must present all written offers/counteroffers with written confirmation of receipt
• ✓Must not advise any party how to gain an advantage at the other's expense

A licensee may not accept funds/deposits from a prospective purchaser without ensuring adequate precautions (escrow or otherwise) are established when the licensee knows, or conditions palpably give reason to know, facts that reasonably create doubt about the seller's ability to perform contractual obligations or to return funds if a contingency fails.

• ✓No licensee may accept purchaser funds without adequate escrow/precautions if there is reasonable doubt about the seller's ability to perform
• ✓The rule applies when doubt exists about the seller's ability to return funds if a contingency fails

The safeguard requirement does not apply if, before accepting funds, the licensee adequately informs the purchaser of the risk and secures a separate signed writing acknowledging the risk/contingency, the disposition of the funds, and the absence of any licensee representations about the seller's solvency or ability to return funds. Escrow funds may be held by any legally authorized person or entity, such as the broker, lawyers, or banks.

• ✓Exception applies when the purchaser signs a separate writing acknowledging risk, fund disposition, and absence of solvency representations
• ✓Escrow funds may be held by any legally authorized person or entity, including the broker, lawyers, or banks

The Department of Banking and Insurance Licensing Services Bureau, Real Estate Section, processes applications for: Real Estate Salesperson; Salesperson (Referral); Broker-Salesperson; Broker-Sole Proprietor; Broker-Business Entity; Broker of Record of a licensed business entity; and Branch office.

• ✓Seven license types are processed by the Real Estate Section
• ✓Includes salesperson, salesperson (referral), broker-salesperson, sole proprietor broker, business entity broker, broker of record, and branch office

The NJ Real Estate Commission is continued as a division within the Department of Insurance. It consists of eight members appointed by the Governor: five must have been real estate brokers for at least 10 years, two are public members, and one is a department representative. Each member (except the department rep) must have been a NJ resident for at least 10 years. Non-department members serve three-year terms.

• ✓The Commission has eight members appointed by the Governor
• ✓Five members must have been brokers for at least 10 years; two are public members; one is a department representative
• ✓A majority of voting members constitutes a quorum
• ✓Members must have been NJ residents for at least 10 years

The commission is expressly vested with power to promulgate and enforce all necessary rules and regulations for the conduct of real estate schools offering pre-licensure and continuing education courses.

• ✓Commission may promulgate and enforce rules for real estate schools
• ✓Rules cover both pre-licensure and continuing education courses

Key deadlines: original license applications within one year of completing prelicensure/education; reinstatement applications within two years of the last license's expiration (unless exempt); office closing affidavit within 30 business days of closing; change of address prior to or immediately upon moving; temporary broker license within 30 business days of death/incapacity of sole proprietor or broker of record.

• ✓Original license: apply within one year of completing prelicensure course/education
• ✓Reinstatement: within two years of expiration of the last license held (unless exempt)
• ✓Office closing affidavit: within 30 business days of closing
• ✓Temporary broker license: within 30 business days of death or incapacity of sole proprietor/broker of record

Renewal deadlines: the initial renewal application is due by June 30 of the year the license expires; the first supplemental renewal application is due 45 days from its issue date; the second supplemental renewal application is due 30 days from its issue date. Late fees apply to renewals postmarked/received after these deadlines.

• ✓Initial renewal application is due by June 30 of the expiration year
• ✓First supplemental renewal: due 45 days from date application issued
• ✓Second supplemental renewal: due 30 days from date application issued
• ✓Late fees are assessed for renewals postmarked and received after the deadlines

License applications are normally processed within 15 business days of receiving a complete and accurate application with all correct fees. Processing times may vary during biennial renewal periods. License certifications are also normally processed within 15 business days of receiving the written request and correct fee.

• ✓Applications are normally processed within 15 business days of a complete, accurate submission with fees
• ✓Processing times may vary during biennial renewal
• ✓License certifications are normally processed within 15 business days of request and fee

Applicants for broker, broker-salesperson, or salesperson licenses must be at least 18 years old, have the equivalent of a high school education, pay a non-refundable $50 application fee, furnish evidence of good moral character, and submit fingerprints and written consent for a criminal history background check (at the applicant's cost). Nonresident applicants irrevocably consent to service of process on the Commission secretary.

• ✓Applicants must be at least 18 years old and have a high school equivalent education
• ✓A non-refundable $50 application fee is required
• ✓Applicants must submit fingerprints and undergo a criminal history background check at their own cost
• ✓Applicants must furnish evidence of good moral character

Every applicant for a broker or broker-salesperson license must first have held a NJ salesperson's license and have been actively engaged full-time in the real estate brokerage business in NJ for three years immediately preceding application. This may be waived if the applicant held a broker's license in another state, was actively engaged for at least three years, meets educational requirements, and qualifies by examination.

• ✓Broker/broker-salesperson applicants must first hold a NJ salesperson license
• ✓Applicants must have three years of full-time active salesperson experience immediately preceding application
• ✓The experience requirement may be waived for qualified out-of-state broker license holders

No broker license may be granted to a general partnership or corporation unless at least one partner/officer qualifies and holds a license as its authorized broker. The entity's license ceases if it lacks an authorized broker at any time. A limited partnership requires its general partner to hold a broker license. A change in authorized broker status requires a $50 fee.

• ✓A partnership or corporation must have at least one licensed authorized broker
• ✓The entity license ceases if there is no authorized broker at all times
• ✓A limited partnership's general partner must qualify and hold a broker license
• ✓A change in license status of an authorized broker requires a $50 fee

Reinstatement within two years of expiration requires proof of completed continuing education. For broker/broker-salesperson lapses of more than two but less than five years, applicants must complete CE, work as salesperson full-time one year, pass the broker exam, and complete a 90-hour general broker pre-licensure course. For lapses over five years, they must pass the salesperson exam, work three years as a salesperson, fulfill all first-time educational requirements, and pass the broker exam.

• ✓Reinstatement within two years requires proof of completed continuing education
• ✓Broker lapse of 2-5 years requires CE, one year salesperson work, broker exam, and a 90-hour course
• ✓Broker lapse over 5 years requires salesperson exam, three years of salesperson work, and full educational requirements
• ✓Salesperson lapse of two years or more requires attending a licensed school and passing the state exam

Before completion, a secondary registration subdivider may respond to NJ-resident inquiries with general information and advertising materials, but may NOT offer a contract, collect deposit money, or subsidize travel to the property until a notice of completion is issued or registration is deemed complete. A purchaser may rescind without cause by midnight of the seventh calendar day after signing the contract or after receiving notice that secondary registration is complete, whichever is later.

• ✓Until registration is complete, the subdivider may not offer a contract, collect deposits, or subsidize travel
• ✓The purchaser may rescind by midnight of the seventh calendar day after contract execution or notice of completed registration, whichever is later

A subdivider/developer owning subdivided land with a completed residential unit (or a contract to construct and deliver one within two years) may register as a secondary registration subdivider if: (1) registration occurs before executing a contract with or accepting a deposit from an NJ-resident purchaser; (2) the subdivider is not already registered under P.L.1989, c.239; and (3) the subdivision does not qualify for the section 6 exemption.

• ✓A completed residential unit, or contract to build one within two years, is required to use secondary registration
• ✓Registration must occur before executing a contract with or accepting a deposit from a New Jersey resident purchaser

The application must include: the property name/address; the subdivider's name/address; a description of the offering with certifications of legal compliance, escrow/protection of NJ residents' deposit moneys until closing, and ability to convey title; copies of conveyance forms including a seven-day right of rescission; a disclosure statement of common property/HOA obligations/club membership/special taxing districts; a certification of no disqualifying convictions or injunctions; consent to service of process/NJ court jurisdiction; and a filing fee.

• ✓Conveyance forms must include a seven-day right of rescission
• ✓NJ residents' deposit money must be held in escrow (or otherwise protected) until closing and delivery of the unit

Within 30 days of receiving a substantially completed application with all fees, the commission must provide a notice of completion or a notice of deficiency. If the commission provides neither within 30 days, the secondary registration is deemed complete. The registrant must immediately report material changes but is exempt from the annual reporting requirement of section 14.

• ✓If NJREC issues no completion or deficiency notice within 30 days, the secondary registration is deemed complete
• ✓Secondary registrants must immediately report material changes but are exempt from the annual reporting requirement

Before executing a sales contract, the secondary registration subdivider must provide the purchaser a copy of the required disclosure statement and obtain a signed receipt. Violations or untrue/omitted material facts in the application are fined under section 20 (C.45:15-16.46). This section does not apply where registration is required under the federal Interstate Land Sales Full Disclosure Act with HUD's Office of Interstate Land Sales Registration.

• ✓The subdivider must provide the disclosure statement and obtain a signed receipt before contract execution
• ✓The section does not apply where federal ILSFDA registration with HUD is required

With exceptions for fees paid to the fingerprint scanning vendor, the license examination vendor, and online transfer/termination fees (per N.J.A.C. 11:5-3.11), all fees prescribed by the Real Estate License Act must be paid by broker's business account check, certified or bank check, or money order payable to the State Treasurer of New Jersey. No cash or currency is accepted.

• ✓Statutory fees must be paid by broker's business check, certified/bank check, or money order
• ✓Payment must be payable to the State Treasurer of New Jersey
• ✓No cash or currency is accepted

Any broker who charges or collects an advance fee over $25.00 for services to be rendered (such as advertising costs) under an advance fee agreement must, within 90 days after the charge or collection, furnish the principal an accounting of the use of the moneys. The accounting must state the actual amount of each expenditure, including advertising dates and publication names, and detail any other promotional expenditures.

• ✓Advance fees over $25.00 under an advance fee agreement require an accounting within 90 days of charge/collection
• ✓The accounting must detail actual amount of each expenditure, including advertising dates and publication names
• ✓Non-advertising promotional expenditures must also be detailed

Any NJ citizen who served in the armed forces or as a WWII Merchant Marine, is honorably discharged, was wounded or disabled in the line of duty, has completed approved real estate courses, and passed the exam may obtain a broker, broker-salesperson, or salesperson license without cost and without needing salesperson experience for a broker license. Renewals are granted without fees upon request.

• ✓Qualifying disabled veterans obtain licenses without cost
• ✓Broker license may be granted without qualifying salesperson experience
• ✓Renewals granted without fees upon request
• ✓Applicant must have completed approved courses and passed the exam

An agency or transaction broker relationship ends at the earliest of completion of performance, expiration of term, mutual agreement, or written notice. Termination by mutual agreement or written notice requires written confirmation to take effect; termination by completion or expiration does not. After termination the firm only owes a timely accounting and continued confidentiality.

• ✓Relationship ends at the earliest of completion, expiration, mutual agreement, or written notice
• ✓Termination by mutual agreement or written notice requires written confirmation to take effect
• ✓Termination by completion or expiration does not require written confirmation
• ✓After termination the firm owes only accounting and confidentiality duties

Absent termination by expiration or completed closing, a disclosed dual agent's brokerage services agreements with buyer and seller may only be terminated in writing, signed by the applicable party, with confirmed delivery to the disclosed dual agent.

• ✓Dual agency agreements require written signed termination with confirmed delivery
• ✓This applies unless terminated by expiration or completed closing

The Commission requires an individual licensee, or any officer, director, partner, or owner of a controlling interest in a licensed corporation or partnership, to complete an electronic fingerprint scan through the State-contracted vendor, pay the processing fees, and submit proof of completion with the licensing application. Evidence of completion includes the applicant's copy of the vendor's completed form and a copy of the payment receipt. Corporations/partnerships must submit this evidence for each officer, director, partner, or controlling owner.

• ✓Individual licensees and controlling persons of entities must complete an electronic fingerprint scan
• ✓Proof includes the vendor's completed form and payment receipt copy
• ✓Corporations/partnerships must submit proof for each officer, director, partner, or controlling owner

Records must include checkbook stub/ledger references identifying each deposit's date, amount, payor, related property, and reason held, plus each disbursement's date, amount, payee, and purpose. Trust/escrow withdrawals must be only by authorized bank transfer or check payable to a named payee — never to cash. A proper ledger book (not a regular checkbook ledger) must show each separate trust transaction with a running balance agreeing with the computed control figure.

• ✓Checkbook records must identify each deposit's date, amount, payor, property, and reason held, and each disbursement's date, amount, payee, and purpose
• ✓Trust/escrow withdrawals must be by authorized bank transfer or check to a named payee, never to cash
• ✓A regular checkbook ledger is not sufficient; a proper trust ledger book showing each separate transaction is required
• ✓A running balance must be kept that agrees with the control figure (beginning balance plus receipts minus disbursements)
• ✓Ledger books may be electronic if reproducible on paper depicting complete transaction history for six years

Every broker must keep records of all funds of others for not less than six years from the date of receipt, and deposit those funds per N.J.A.C. 11:5-5.1. Whenever trust funds are received in cash, the licensee must issue the payor a signed written receipt stating date, amount, purpose, and payor, and retain a copy.

• ✓Records of all funds of others must be kept for not less than six years from receipt
• ✓Cash trust funds require a signed written receipt to the payor stating date, amount, purpose, and payor
• ✓A copy of the receipt must be retained by the broker

Brokers must keep records showing at least quarterly reconciliation of the checkbook balance, bank statement balance, and client trust ledger balances. Required records also include all bank statements, cancelled checks, duplicate deposit slips, offers, contracts of sale, listing agreements, leases, property management agreements, statements to parties, bills paid from escrow (only per written authorization), payment records to licensees/cooperating brokers, and security deposit receipts and releases.

• ✓At least quarterly reconciliation of checkbook, bank statement, and client trust ledger balances must be documented
• ✓Records must include bank statements, cancelled checks, duplicate deposit slips, and credit card confirmation slips
• ✓Records must include offers, contracts of sale, listing agreements, leases, and property management agreements
• ✓Bills paid from escrowed funds may only be made pursuant to written authorization
• ✓Records must include security deposit receipts and checks/letters accompanying their release

On transactions where the broker received no property or funds of others, records (fully executed leases/contracts/management/listing agreements, bills for services, payment records, and general business account bank records) must be kept six years from the earlier of the listing/management agreement date or the contract/lease date. Unaccepted offers and expired listings under which no contract or tenancy resulted must be kept six months from the offer date or listing expiration date.

• ✓No-funds transactions: records kept six years from the earlier of the listing/management agreement date or the contract/lease date
• ✓Unaccepted offers and expired listings with no resulting contract/tenancy: kept six months from offer or listing expiration date
• ✓General business account bank statements, cancelled checks, and deposit slips must be maintained for these transactions

Financial books and records must be maintained per generally accepted accounting practice and located at the broker's main NJ office (or a branch where separate accounts are maintained). Records may be paper or electronically stored if readily reproducible on paper depicting complete activity history and accessible for the six-year period. All records must be available for inspection and copying by an authorized Commission representative, and licensees may be required to certify the accuracy of reproduced data.

• ✓Records must be kept per generally accepted accounting practice at the main NJ office or applicable branch
• ✓Electronic storage is permitted if data is readily reproducible on paper showing complete activity history for six years
• ✓All records, including e-mail-generated items, must be available for Commission inspection and copying
• ✓Licensees may be required to certify the accuracy of reproduced data