In early July 2024, Governor Murphy signed Bill S3192/A4454, also known as the “Real Estate Consumer Protection Enhancement Act” (the “Act”), into law. The Act incorporates certain additional protections for consumers engaging in residential real estate transactions.
Who is affected by the New Jersey Consumer Protection Enhancement Act?
The Act affects buyers, sellers and those who assist consumers in buying or selling a property, such as real estate brokerage firms, buyer’s agents, seller’s agents, dual agents, designated agents, and transaction brokers.
When did the law go into effect?
August 1, 2024
What at the six key takeaways from the Act?
Brokerage services agreements are now required.
All licensed real estate brokers must use written brokerage agreements outlining the services they will provide to clients throughout a residential real estate transaction. This change is intended to enhance professionalism and accountability. Such agreements include, but are not limited to, sale and rental listing agreements; buyer39 lessee agency agreements; and transaction broker, dual agency, and designated agency agreements.
- Seller's Property Condition Disclosure Statements are now required.
Sellers must provide a fully completed property condition disclosure statement before buyers are contractually obligated to purchase. This requirement seeks to ensure buyers have more property-related information at the onset of a transaction, thereby promoting more informed buying decisions and reducing potential disputes.
- A Designated Agency is now allowed.
Brokerage firms can now appoint different agents to represent both the seller and the buyer in the same transaction. This change aims to enhance the representation and services provided to both buyers and sellers.
- Signage is now required at open houses.
Listing agents must disclose who they represent at open houses through visible signage at the entrance to the home or on a sign-in sheet. This change aims to promote transparency for potential buyers.
- Compensation Disclosure in MLS is prohibited.
Sellers' agents can no longer disclose compensation on Multiple Listing Services (MLS) or notify MLS about cooperative compensation if prohibited by MLS policy. A change intended to avoid conflicts of interest and ensure fair marketing practices.
- Continuing education requirements must be met.
Licensed real estate professionals must complete continuing education classes every two years, including a mandatory course on agency. This requirement aims to fosters ongoing professional development to maintain industry standards.
Next Steps
If you have any questions about how this new law affects you as a buyer, seller, or real estate professionals, please don’t hesitate to contact me or another one of Flaster Greenberg’s real estate practice attorneys.
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