Real Estate Practice in New Jersey
New Jersey practice features a distinctive attorney-review period on licensee-prepared contracts and strict escrow rules. This chapter covers attorney review, escrow handling, and property disclosure.
Attorney Review
When a licensee prepares a standard-form contract for a one-to-four family residence, the contract must include an attorney-review clause. Either party may have an attorney review and disapprove the contract within three business days; a timely disapproval voids the contract. This safeguard exists because licensees, not attorneys, complete the initial form, so consumers retain a short window for legal review.
Escrow and Trust Money
Deposit and escrow money must be handled through the broker's trust account. A salesperson who receives funds must deliver them promptly to the broker, and the broker must keep trust money separate from operating and personal accounts. Commingling or converting escrow funds is a serious violation of New Jersey license law.
Property Disclosure and Honest Dealing
New Jersey sellers commonly complete a property condition disclosure statement, and licensees must not help conceal known material defects. Case law also requires disclosure of known off-site conditions in some circumstances. Accurate, honest disclosure protects consumers and reduces the licensee's exposure to misrepresentation claims.