Top 3 Questions From NJ Realtors® Legal Resource Library

The New Jersey Realtors® Legal Resource Library is intended to help answer legal questions that arise in your day-to-day business. Browse the library at legal.njrealtor.com for past questions and/or submit a new question. Due to restrictions we have in New Jersey and the practice of law, our team will scrub your question of personal information before it is sent out for legal advice. Your answer will then be sent to you, without any personal information, and posted for the rest of membership to see.

DISCLAIMER: Answers are current as of date of printing, but please visit legal.njrealtor.com for any updates.

OFFER ACCEPTED, NO MORE SHOWINGS

Q: We have seen agent notes on active MLS listings that state “Offer Accepted, No More Showings”. These properties are not out of attorney review. We have been taught that until a property is out of attorney review it has to be shown or put as “Under Contract” in the MLS. Has this changed and is it allowed? If a seller states that they do not want more showings, is there something for them to sign?

A: Nothing has changed. There is no specific document for sellers to sign indicating that they don’t want to entertain any further offers. Only after attorney review can it be marked “under contract.”

PREPAID RENT

Q: Can rent be prepaid by a tenant in NJ?

A: Any prepaid funds held to secure future rents are considered to be part of the security deposit. This includes the last month’s rent. It does not matter how the prepaid funds are labeled. The courts have determined that advanced rents in excess of one-andone-half times the monthly rental payment violate the Security Deposit Law. The landlord may only require one and one-half times the tenant’s monthly rent as security and the first month’s rent at the inception of the lease. The landlord may not require more than two and one-half times the monthly rent at the inception of the lease, this includes the security deposit and the first month’s rent.

CRIMINAL HISTORY FOR POTENTIAL TENANTS

Q: I am a listing agent who has a landlord that wants me to consider criminal records before presenting potential tenants— is this allowed?

A: The U.S. Department of Housing and Urban Development does not prohibit the use of criminal history-based policies. However, it is recommended that the agent use many different criteria, such as employment history, financial ability, etc. since any one criteria may have a disparate impact on a member of a protected class and in 2015 the United States Supreme Court held that a member of a protected class could bring a disparate impact claim under the Fair Housing Act.

Policies should not be blanket or arbitrary and should be tailored to serve a substantial legitimate and nondiscriminatory interest of the housing provider and achieve the fundamental interest in ensuring resident safety and protecting property.

On Friday, June 18, 2021 Governor Murphy signed into law the “Fair Chance in Housing Act.”

The U.S. Department of Housing and Urban Development does not prohibit the use of criminal history-based policies. However, S250/A1919, which is known as the “Fair Chance in Housing Act,” was signed into law by the Governor of New Jersey. Under this law, with certain exceptions, a landlord and its agent in New Jersey are prohibited from requiring a potential tenant to complete any housing application that includes any inquiries regarding the tenant’s criminal record prior to there being a “conditional offer,” which is defined as “ an offer to rent or lease a rental dwelling unit to an applicant that is contingent on a subsequent inquiry into the applicant’s criminal record, or any other eligibility criteria that the housing provider may lawfully utilize.” This law goes into effect seven (7) months from when it was signed. In the interim, it is recommended that the agent use many different criteria, such as employment history, financial ability, etc. since any one criteria may have a disparate impact on a member of a protected class and, in 2015, the United States Supreme Court held that a member of a protected class could bring a disparate impact claim under the Fair Housing Act.