New Jersey Real Estate Salesperson Exam — All Questions

Real estate salespersons in New Jersey are licensed and regulated by:

• a.The New Jersey Department of Community Affairs
• b.The New Jersey Association of Realtors
• c.The New Jersey Real Estate Commission, within the Department of Banking and Insurance✓
• d.The New Jersey Superior Court

The New Jersey Real Estate Commission (REC) operates within the Department of Banking and Insurance and licenses and disciplines brokers, broker-salespersons, and salespersons under N.J.S.A. 45:15-1 et seq. A trade association is a private membership organization and has no licensing authority.

A New Jersey salesperson may accept a commission for brokerage services:

• a.Only from the broker with whom the salesperson is licensed✓
• b.From any licensee involved in the deal
• c.Directly from the buyer at closing
• d.From the Real Estate Commission's fee account

A New Jersey salesperson works under and is paid only by the broker who holds the salesperson's license. A salesperson may not accept compensation directly from a buyer, seller, or another broker. The employing broker is responsible for supervising the salesperson and for handling escrow money.

The New Jersey Real Estate Guaranty Fund exists primarily to:

• a.Insure the value of properties sold through licensed brokers
• b.Reimburse consumers for an actual monetary loss from certain fraudulent acts of a licensee when a judgment cannot be collected✓
• c.Provide down-payment assistance to buyers
• d.Pay the salaries of Commission staff

The Guaranty Fund reimburses members of the public who obtain a final judgment against a licensee for an actual loss caused by fraud, misrepresentation, or deceit in a licensed transaction and cannot otherwise collect, subject to statutory limits. When the fund pays, the licensee's license is suspended until the fund is repaid. It is not an insurance or assistance program.

How is the New Jersey Real Estate Commission composed?

• a.Six brokers, two public members, and one State official
• b.Five brokers, two public members, and one State official✓
• c.Three brokers, three public members, and two officials
• d.Seven brokers, one public member, and no State official

The Commission, established in 1921, has eight members: five who have been licensed New Jersey brokers for at least ten years, two public members, and one representative of an appropriate governmental department. Cite: NJ Real Estate Commission, About the New Jersey Real Estate Commission (nj.gov/dobi/division_rec/reabout.html)

Besides the Real Estate Guaranty Fund, which law does the New Jersey Real Estate Commission administer?

• a.The Planned Real Estate Development Full Disclosure Act
• b.The New Jersey Consumer Fraud Act's real estate part
• c.The Real Estate Sales Full Disclosure Act✓
• d.The Hotel and Multiple Dwelling Law of New Jersey

The Commission administers the Real Estate Guaranty Fund and the Real Estate Sales Full Disclosure Act, which governs the marketing of out-of-State property in New Jersey. The Planned Real Estate Development Full Disclosure Act is administered by the Department of Community Affairs, not the Commission. Cite: NJ Real Estate Commission, About the New Jersey Real Estate Commission; N.J.S.A. 45:22A-23(f)

Before the Real Estate Guaranty Fund will consider paying a judgment creditor, what must that creditor already have done?

• a.Had a writ of execution issued and examined the debtor✓
• b.Filed a complaint with the Commission within 30 days
• c.Obtained a court order directing the Fund to pay out
• d.Proven the licensee's license was already suspended

The judgment creditor must have a writ of execution issued, make a bona fide effort to examine the judgment debtor under oath, conduct other reasonable searches for assets, and report the results in writing to the officer to whom the writ is directed. The Fund is a last resort, not a first stop. Cite: N.J.A.C. 11:5-8.2(b)

Under the rule adopted in 2024, when may a New Jersey salesperson be paid a brokerage commission through a limited liability company?

• a.Whenever the employing broker consents in writing
• b.Only if the LLC itself holds a broker license
• c.If the LLC is registered with the Commission✓
• d.Only if the LLC has no other members

A salesperson or broker-salesperson may accept commission payment through an entity formed and registered with the Commission, and the licensee must be a member, partner, shareholder or otherwise hold an ownership interest in it. The entity itself performs no brokerage services and holds no license. Cite: N.J.A.C. 11:5-3.16 (adopted effective August 19, 2024); N.J.S.A. 45:15-16

A New Jersey broker terminates a salesperson. How quickly must the broker return the license to the Commission or process the termination online?

• a.Within 30 calendar days
• b.Within 10 business days
• c.Within three calendar days
• d.Within 5 business days✓

Within five business days of issuing a notice of termination or receiving a resignation, the broker must deliver or mail the license to the Commission or process the termination online, and must send written notice of having done so to the licensee's last known residence address. Cite: N.J.A.C. 11:5-3.11

Which conduct is blockbusting under the New Jersey Real Estate Commission's rules?

• a.Refusing to show a listing to a buyer who holds a housing voucher
• b.Soliciting listings based on a race-linked change in value✓
• c.Splitting a commission with an unlicensed referrer
• d.Advertising a property without the broker's name

Blockbusting is affirmatively soliciting the sale, lease or listing of residential property on the grounds of an alleged change in value due to the presence or prospective entry into the neighborhood of persons of another race, religion or ethnic origin. The other three answers describe real violations, but of different rules. Cite: N.J.A.C. 11:5-7.4(a)

A buyer signs a contract with the developer for a condominium unit. Under the Planned Real Estate Development Full Disclosure Act, how long does the buyer have to cancel without cause?

• a.Until midnight of the seventh calendar day after signing✓
• b.Until midnight of the third business day after signing
• c.Until midnight of the tenth calendar day after signing
• d.Until midnight of the fifth business day after signing

The purchaser may cancel without cause by sending or delivering written notice of cancellation by midnight of the seventh calendar day following the day the contract was executed, and the deposit must be promptly refunded in full. The notice must appear in 10-point bold type or larger directly above the purchaser's signature line. Cite: N.J.S.A. 45:22A-26(b)

PREDFDA exempts offerings of fewer than 100 lots, parcels, units or interests. How does that exemption apply to a 40-unit condominium?

• a.It applies, because the offering is under 100 units
• b.It applies only if the units are all owner-occupied
• c.It applies once the association is incorporated
• d.It does not apply to condominiums at any count✓

The under-100 exemption expressly does not apply to condominiums and cooperatives, irrespective of the number of lots, parcels, units or interests offered or disposed of. A 40-unit condominium must still register. Cite: N.J.S.A. 45:22A-25(a)(7)

Under PREDFDA, when must a developer deliver the current public offering statement to a purchaser?

• a.Within ten days after the contract is signed
• b.At the closing of title on the unit purchased
• c.On or before the contract date of disposition✓
• d.Before the buyer's mortgage commitment issues

No developer may dispose of a lot, parcel, unit or interest unless a current public offering statement is delivered to the purchaser on or before the contract date of the disposition, and the development must be registered with the agency before any interest is offered. Cite: N.J.S.A. 45:22A-26(a)

A New Jersey buyer contracts for a lot in a registered subdivision covered by the Real Estate Sales Full Disclosure Act. The contract may be cancelled without cause

• a.by midnight of the seventh calendar day after execution✓
• b.by midnight of the third business day after execution
• c.within thirty days of receiving the offering statement
• d.at any time before the deed is recorded by the county

The Commission's rules require that such a contract be cancellable without cause by written notice sent or delivered by midnight of the seventh calendar day following execution, with all monies promptly refunded. The contract must carry that notice in 10-point boldface type or larger. Cite: N.J.A.C. 11:5-9.17

Which sellers must complete the Flood Risk Addendum, questions 109 through 117, of New Jersey's property condition disclosure statement?

• a.Only sellers in a FEMA Special Flood Hazard Area
• b.All sellers, residential and non-residential alike✓
• c.Only sellers of one-to-four family homes in the State
• d.Only sellers whose property has flooded before

Completion of the Flood Risk Addendum is mandatory for all sellers of real property in New Jersey, including non-residential property; questions 1 through 108 are mandatory only for residential transactions. The disclosure must be made before the purchaser becomes obligated under any contract of purchase. Cite: P.L.2023, c.93; NJDEP Flood Risk Disclosure FAQs (dep.nj.gov/flooddisclosure)