NAR Settlement & CPEA

NJ Real Estate Consumer Protection Enhancement Act (CPEA)

In early July, Gov. Murphy signed Bill S3192/A4454, also known as the Real Estate Consumer Protection Enhancement Act, into law. The law strengthens both consumer and real estate licensee protections.

Highlights of  CPEA

Seller’s Property Condition Disclosure Statement Now Required

Sellers must provide buyers a signed and completed property condition disclosure statement before the buyer becomes contractually obligated to purchase a property.

Designated Agency Now Allowed

Designated agency allows for different licensees within the same brokerage firm to represent either party—one licensee to represent the seller as the “seller’s designated agent” and one licensee to represent the buyer as the “buyer’s designated agent” in the same transaction

Brokerage Services Agreements Required

All real estate licensees are required to use brokerage agreements, which outline services they will provide to all clients over the course of a respective transaction.

Signage Required at Open Houses

Listing agents are required to disclose who they represent at open houses in the form of signage either at the entrance or sign-in sheet.

Compensation Disclosure Changes in Multiple Listing Services

Sellers’ agents can no longer disclose compensation in Multiple Listing Services


New CE Requirement Added – Agency

CPEA Resources

Create a customized social media campaign to share the importance of a REALTOR® in a real estate transaction

Changes to the New Jersey Real Estate Broker and Salesperson Act by P.L. 2024, c. 32:  Licensee Business Relationships (including Designated Agency); Consumer Information Statement; Brokerage Service Agreements; Property Condition Disclosure Statement; Broker Compensation; Signage at Showings; and New Continuing Education Requirement

The CIS Statement above was approved by the New Jersey Real Estate Commission on August 1, 2024

Customize social media posts highlighting the new law to help spread the word.  Templates are available at the bottom of the CPEA resource page on New Jersey REALTORS®

Additional Resources

Video series explaining various elements of the settlement.

Fostering consumer-friendly real estate

Frequently Asked Questions / FAQ

Q: What is "designated agency"?

A: “Designated agent” means, in any transaction where the buyer’s agent and the seller’s agent are affiliated with the same brokerage firm or are the same broker, broker-salesperson or salesperson, the broker, broker-salesperson or salesperson who has been designated by the brokerage firm, including but not limited to by a broker or managing broker of the brokerage firm, to solely represent the buyer as the buyer’s agent and another broker, broker-salesperson or salesperson who has been designated by the brokerage firm, including but not limited to a broker or managing broker of the brokerage firm, to solely represent the seller as the seller’s agent in a particular real estate transaction.

Q: What provisions must be included in written buyer agreements?

A:  The written agreement must include: 

  1. A specific and conspicuous disclosure of the amount or rate of compensation the Participant will receive or how this amount will be determined, to the extent that the Participant will receive compensation from any source. 
  2. The amount of compensation in a manner that is objectively ascertainable and not open-ended.
  3. A term that prohibits the Participant from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer; and 
  4. A conspicuous statement that broker fees and commissions are not set by law and are fully negotiable.

    source: https://www.nar.realtor/the-facts/nar-settlement-faqs

Q: Do bank owned properties need a Seller Disclosure?

Yes, they do.

Q: What happens if the Seller is offering more than is what is on the Buyers Agency Agreement?

A Buyers Agent cannot accept more than the compensation listed on the Buyers Agency Agreement. As all compensation is negotiable, the Buyers Agency can be amended, with clients permission or rewritten.

 

Q: Do Commercial properties need a Seller Disclosure?

The Flood Risk portion is required.

Q: Do Rentals need a Sellers Disclosure?

Not a Seller’s Disclosure, but landlords do need to provide Flood Risk information to tenants.

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