Awarded to 38 Students by NJ Realtors® Educational Foundation
1,400
In-Person and Virtual Statewide Broker Briefing Attendees
What’s Happening in the Industry
Are your agents concerned about how practice changes will affect their business? Learn how to discuss these changes and support your agents during the transition.
The New Jersey Real Estate Commission formally adopted a rule allowing commission payments to be made to Limited Liability Companies, as initiated by New Jersey Realtors® and signed by the governor. However—this rule will not go into effect until six months after it is published by the New Jersey Register, which will be sometime in 2025 Click here to read the adopted rule.
The National Association of Realtors® 2024 Snapshot of Race & Homebuying in America is out now. According to the report, Asian American homeownership was highest among minority groups at 63.3% Read the report to explore homeownership trends among racial groups, affordability challenges, and factors affecting homeownership.
The Department of Veterans Affairs’ new temporary policy change, allowing military homebuyers to directly compensate their real estate agents, is effective beginning Aug. 10. The policy change follows extensive advocacy by the National Association of Realtors® to change the department’s previous rule prohibiting VA borrowers from paying a “brokerage fee or commission in connection with the services” of a real estate professional. Learn more about the temporary policy.
LEGISLATIVE UPDATES
Real
Estate Consumer Protection Enhancement Act Takes Effect Aug. 1
The Real Estate Consumer Protection Enhancement Act takes effect today, Aug. 1. The law strengthens protections and transparency for both consumers and real estate licensees. It mandates the use of the Seller’s Property Condition Disclosure Statement, requires disclosure of representation at open houses, allows for designated agency, mandates brokerage services agreements, and adds agency as a mandatory continuing education topic. Learn more at njrealtor.com/cpea.
Huge Win for Independent Contractors
What Was the Case About?
In the case of James Kennedy, II vs. Weichert Co., it was considered whether the independent contractor agreement between a broker and a salesperson excludes the salesperson from the Wage Payment Law (WPL), a statute that governs compensation for employees but does not apply to independent contractors. The New Jersey Supreme Court recently ruled in favor of New Jersey Realtors®, reversing and remanding the case to the trial court with an order to dismiss Kennedy’s complaint.
The Court decided that Kennedy, “…who agreed in writing to affiliate with Weichert as an independent contractor, must accordingly be treated as an independent contractor.”
The court held that the written agreement is dispositive, meaning they must be honored even if they conflict with other laws or regulations, and defines the relationship between the broker and salesperson.
How Does This Impact Me?
This ruling allows brokerage firms to classify agents as either independent contractors or employees. This case represents a significant
BUILDING CONNECTIONS
Do you have agents making a positive impact in their community? If you know someone in your office who is an active volunteer, nominate them for the 2024 New Jersey Realtors® Good Neighbor Award or encourage your active volunteers to apply.
New Jersey Realtors® Good Neighbor Award recognizes three outstanding Realtors® or Realtor-Associates® making a positive impact, whether through neighborhood cleanups, charitable donations, nonprofit collaborations, and more. Winners receive grants: $2,500 for first place, $1,500 for second, and $1,000 for
win for the real estate industry in New Jersey, providing brokers with greater flexibility in structuring business relationships.
How Does This Impact How My Agents Operate?
The ruling impacts agents by upholding the independent contractor status under the WPL. The decision upholds the right for brokers and salespersons to enter into independent contractor or employee agreements, allowing their agents to be managed as independent contractors or employees.
What’s the Background on This Victory?
This decision is the result of a multi-year, multi-pronged lobbying effort led by New Jersey Realtors® to protect the independent contractor status of real estate licensees. This effort began in 2017, aimed to change the New Jersey Real Estate Commission regulations to identify independent contractors under a brokerage firm. It was then codified into law in 2018 by Gov. Murphy, and a 2021 law ensured retroactivity.
third, benefiting their chosen 501(c)(3) charity or organization.
Award winners are also acknowledged in the January/February issue of New Jersey Realtor® Magazine, celebrated during the annual awards ceremony at Realtors® Triple Play in December, highlighted on our social media, and more. Don’t let your agents miss out on this opportunity to be recognized for their community service efforts—applications must be submitted by Sept. 6.
Submit your application.
Designated Realtor ®
Real Estate Consumer Protection Enhancement Act FAQs
When does the Real Estate Consumer Protection Enhancement Act go into effect?
The law goes into effect today, Aug. 1, and the National Association of Realtors® mandatory practice changes must be implemented by Aug. 17.
Who is required to complete the Seller’s Property Condition Disclosure Statement?
The Real Estate Consumer Protection Enhancement Act requires all sellers (including banks, estate administrators, and other entities) to disclose, on the Seller’s Property Condition Disclosure Statement, any known condition of the property to the best of their knowledge. While certain disclosures (ex. flood risk) must be disclosed beyond actual knowledge, most of the Seller Property Condition Disclosure Statement relies upon a seller’s actual knowledge. If a seller doesn’t have actual knowledge, the seller can answer ‘unknown.’ Then it is up to the buyer to gauge whether to rely upon or trust whether the seller’s answers are complete/truthful. A seller’s refusal to make the proper disclosures is a violation of the law.
Is Disclosed Dual Agency still allowed?
Yes. Disclosed Dual Agency is still allowed under the new law, which allows an agent to work with both the seller and the buyer with limited fiduciary duties to both sides. The law also introduces an additional form of agency, designated agency, which enables a brokerage to appoint different agents within the brokerage to represent both the seller and the buyer with full fiduciary duties at the clients’ request.
For more FAQs and resources, visit njrealtor.com/cpea
Important Dates Ahead
AUG. 14 Housing Opportunity Foundation Phillies Fundraiser
SEPT. 2 Labor Day—NJ Realtors® Office Closed
SEPT. 5 2024 Realtors® Triple Play Registration Opens
SEPT. 10 Board of Directors Meeting
SEPT. 12 Housing Opportunity Foundation Montclair 5K
SEPT. 23-27 Realtors® Care Week
SEPT. 26 Realtor® Palooza
FEATURE STORY
NJ Realtors® Hosts Statewide Briefing on New Industry Regulations
In response to the Aug. 1 law changes, New Jersey Realtors® hosted a Statewide Broker Briefing in late July for all brokers and Designated Realtors® in the state. The event saw more than 1,400 combined in-person and virtual attendees and covered antitrust, legal, and regulatory changes.
The seminar began with a presentation from Lauren Donahue, a partner at K&L Gates.
Lauren spoke on the National Association of Realtors® antitrust settlement, the Department of Justice investigation, and limiting your exposures. Key practice changes, including compensation offers moving off the Multiple Listing Service, new mandatory buyer agency agreements, and a timeline for the National Association of Realtors® settlement were discussed. New Jersey Realtors® has been closely monitoring the ongoing antitrust litigation and DOJ investigation with the assistance and consultation of K&L Gates.
Next, there was a panel discussion covering the New Jersey Real Estate Consumer Protection Enhancement Act with NJ Realtors® Chief Counsel Barry Goodman, Partner at Greenbaum, Rowe, Smith & Davis Conor Hennessey, and NJ Realtors® General Counsel Yuliya Tedeschi. The presentation covered an overview of the new law, including an outline and key definitions of each of the business relationships and duties of real estate professionals in New Jersey.
The panel then broke down the new law section by section and held a robust question-and-answer period at the end of the presentation. The recorded panel discussion, their slide deck presentation, and the CPEA overview handout are available for review. Frequently asked questions are being developed, but if your question is a detailed, personal scenario, we urge to you to send it in for review and answers at NJ Realtors® Legal Resource Library
Understanding the Real Estate Consumer Protection Enhancement Act
The Real Estate Consumer Protection Enhancement Act, which went into effect on Aug. 1, came ahead of the Aug. 17 implementation of the National Association of Realtors® practice changes. The new law, which strengthens protections and transparency for consumers and real estate licensees, requires brokerage services agreements, mandates the Seller’s Property Condition Disclosure Statement, introduces designated agency, and more. You may read the bill in its entirety here
The following are six major changes the law provides for:
• Residential sellers must provide a fully completed property condition disclosure form before buyers become contractually obligated to purchase a property. This ensures buyers have all the necessary information, promoting informed decision-making and reducing potential disputes. This applies to all residential sales, including bankowned properties and estates.
• Listing agents will be required to explicitly disclose who they represent at open houses in the form of signage either at the entrance or a sign-in sheet, for all attendees to see. Click here to download a printable Open House Disclosure sign and a customizable sign template
• Designated agency, which enables a brokerage to appoint different agents to represent both the seller and the buyer with full fiduciary duties at the client’s request, is now permissible.
• All real estate licensees will be required to use brokerage services agreements, which outline services they will provide to all clients over the course of a respective transaction.
• Seller’s agents can no longer disclose compensation in Multiple Listing Services or notify MLSs about cooperative compensation if prohibited by MLS policy.
• One course on agency will be added to New Jersey Real Estate Commission continuing education requirements.
We encourage you to visit our resource page to help you prepare for the industry changes ahead, including an overview of the new law, details on the new agency continuing education requirements, a preview of the new buyer agency agreement, an “Agency Explained” guide, and more. New Jersey Realtors® is updating its forms and contracts and will notify members once they are available.
