Chapter 2: Commission rules and regulations. Key terms Flashcards Preview

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Flashcards in Chapter 2: Commission rules and regulations. Key terms Deck (11):
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License law and rules

A sales person may not:
Accept any form of compensation except from there supervising broker.
Maintain an escrow account or hold funds belonging to others or
Work for more than one New Jersey broker at a time.

1

Places of business
Main office and branch office

Main office: every broker must maintain a place of business in the state. The brokers name and the words licensed real estate broker must be displayed on the exterior.
A broker may not allow someone else to use the firms name.

BRANCH OFFICE: each office must be under the direct supervision of a broker or broker salesperson and must have a duplicate license.
The names of all licensees and the branch office supervisor must be recorded with the commission and prominently displayed in the branch office. No branch office can be in the home of a salesperson or broker salesperson.

2

Trust account (escrow account)

Must be kept in an authorized financial institution in New Jersey.
Must be clearly labeled so that it cannot be claimed by creditors or hiers in case of brokers death.
Brokers are prohibited from co-mingling their own funds with the trust account.
The broker is however allowed to leave a small amount of his money in the trust to cover service charges and keep the account open.

3

Advanced fees

When a client provides more than $25 with a broker to assist with advertising costs the broker must give the client an account of how the money is being spent within 90 days.

4

Permanent records

Every broker must keep records of trust account activity for at least six years.

5

Regulation of documents
Sales Contracts

Every person that signs a listing contract should receive a duplicate original.
Any changes should be initialized and those initialize changes should be on all copies. Initialize changes take precedent.
All commissions and fees are negotiable.

6

Regulation of documents
Attorney Review Clause

This gives the buyer and seller the right to consult an attorney who may disapprove a contract within three business days.

7

Regulation of documents
Offers

All written offers must be forwarded to seller within 24 hours and at the time of listing - owners of property must be furnished with a copy of the Attorney General's memorandum regarding the New Jersey law against discrimination.

8

Regulation of documents
Real estate broker who is also an insurance broker

If the broker sells an insurance policy on the property they are selling it must be confirmed separately in writing not less than five days before the actual closing of title.

9

Other documents

The broker must keep copies of accepted offers to purchase for six months.

All copies of contracts to sell and listing agreements must be kept for six years.

10

Waiver of broker cooperation

This is a 30 day exclusive for the broker where no other broker dealers will have the listing.