1. Under New Jersey law, which state agency is responsible for licensing and regulating real estate brokers and salespersons?
- A. New Jersey Department of Banking and Insurance
- B. New Jersey Real Estate Commission ✓
- C. New Jersey Division of Consumer Affairs
- D. New Jersey Department of Community Affairs
The New Jersey Real Estate Commission (NJREC), established under N.J.S.A. 45:15-1 et seq., is the state body responsible for issuing and regulating real estate broker and salesperson licenses in New Jersey.
2. A New Jersey real estate salesperson license is valid for how long before it must be renewed?
- A. One year
- B. Two years ✓
- C. Three years
- D. Four years
New Jersey real estate salesperson and broker licenses are issued on a two-year cycle. Licensees must renew every two years and complete required continuing education as a condition of renewal.
3. In New Jersey, how many classroom hours of pre-licensing education must a candidate complete before sitting for the salesperson licensing examination?
- A. 40 hours
- B. 60 hours
- C. 75 hours ✓
- D. 90 hours
New Jersey salesperson license candidates must complete 75 hours of approved pre-licensing education before taking the salesperson licensing examination. The 90-hour figure is not the current New Jersey salesperson pre-licensing requirement.
4. Under the New Jersey Real Estate License Act, a real estate salesperson MUST operate under the supervision of which of the following?
- A. Any licensed real estate broker or salesperson
- B. A licensed real estate broker only ✓
- C. A licensed broker-salesperson or salesperson with five years of experience
- D. The New Jersey Real Estate Commission directly
Under N.J.S.A. 45:15-9, a salesperson license is issued to an individual sponsored by and working under the direct supervision of a licensed real estate broker. Salespersons may not operate independently or under another salesperson.
5. A New Jersey broker-salesperson who wishes to become an independently licensed broker must have at least how many years of full-time experience as a salesperson or broker-salesperson?
- A. One year
- B. Two years
- C. Three years ✓
- D. Five years
A New Jersey broker applicant must have at least three years of full-time, active experience as a licensed New Jersey salesperson or broker-salesperson immediately preceding the broker license application, so the correct answer is three years.
6. Which of the following activities would require a real estate license in New Jersey?
- A. An attorney negotiating a real estate transaction solely incidental to the practice of law
- B. A property owner selling their own home without assistance
- C. A licensed auctioneer conducting a real estate auction for compensation ✓
- D. A salaried employee managing property owned by their employer
Under N.J.S.A. 45:15-3, a licensed auctioneer selling real estate for others for compensation is engaged in an act that requires a real estate license. Attorneys acting incidentally to law practice, owners selling their own property, and salaried employees managing employer-owned property are among those specifically exempted from the licensing requirement.
7. If a New Jersey real estate salesperson's sponsoring broker dies or ceases to operate, the salesperson's license is automatically:
- A. Revoked permanently
- B. Placed on inactive status until transferred to a new broker ✓
- C. Transferred to the broker's estate for 90 days
- D. Converted to a broker-salesperson license
When a sponsoring broker's license is terminated, surrendered, or the broker dies, the salesperson's license is placed on inactive status. The salesperson must affiliate with a new licensed broker and have the license transferred before resuming licensed activity.
8. Under New Jersey license law, which of the following is grounds for the NJREC to suspend or revoke a real estate license?
- A. Failing to personally inspect every property listed
- B. Commingling a client's escrow funds with the broker's operating funds ✓
- C. Declining to represent a buyer who requests dual agency
- D. Advertising a listing without including the listed price
Commingling — mixing a client's escrow or trust funds with the broker's personal or business operating funds — is expressly prohibited under N.J.A.C. 11:5-1.12 and constitutes a serious violation that is grounds for license suspension or revocation by the NJREC.
9. A New Jersey salesperson who wishes to change employing brokers must:
- A. Wait until the next license renewal period to transfer the license
- B. Notify the NJREC in writing within 30 days of the change
- C. Have the new broker submit a transfer application to the NJREC before the salesperson may act under the new broker ✓
- D. Pass a re-examination before affiliating with the new broker
Under N.J.A.C. 11:5-1.10, a salesperson's license must be formally transferred to the new broker through the NJREC before the salesperson may legally practice under that new broker. The salesperson cannot lawfully conduct licensed activities under the new broker until the transfer is approved.
10. New Jersey license law requires that all real estate trust (escrow) accounts be maintained in which type of financial institution?
- A. Any federally chartered institution regardless of location
- B. An insured bank or savings institution authorized to do business in New Jersey ✓
- C. A New Jersey state-chartered bank only
- D. A brokerage account with a licensed securities dealer
Under N.J.A.C. 11:5-1.12, a broker must deposit and maintain all trust funds in a separate escrow account held in an insured bank or savings institution authorized to conduct business in New Jersey. Federal or out-of-state-only institutions that are not authorized to do business in New Jersey are not permissible.