In a condominium, an individual owns their specific unit in fee simple. The common areas, such as the land, hallways, elevators, and recreational facilities, are owned collectively by all the individual unit owners. The legal structure for this shared ownership is a tenancy in common, where each owner holds an undivided fractional interest in the common elements. This interest is appurtenant to their unit, meaning it is inseparable from the unit and is automatically transferred to the new owner upon the sale of the unit.

A. its duly elected Board of Directors.

The Board of Directors manages and administers the common areas on behalf of the owners' association, but they do not hold legal title to the property.

B. those owners who were original owners of the units.

Ownership interest in the common elements is tied to unit ownership and transfers to the new owner when a unit is sold.

C. any individuals who pay a prorated share of the taxes and maintenance.

Paying maintenance fees is an obligation of ownership, not the basis for it. Ownership is established by the deed to the unit.

1. New Jersey Condominium Act, N.J.S.A. 46:8B-1 et seq.

N.J.S.A. 46:8B-3(d) defines "Common elements" as property owned in common by the unit owners.

N.J.S.A. 46:8B-6 states, "The proportionate undivided interest in the common elements assigned to each unit shall be inseparable from such unit..." This establishes the principle of undivided interest held by all owners, which is the definition of a tenancy in common.

2. French, E. F. (2000). The Constitution of a Private Residential Government: The Smith Act and the Declaration of Covenants, Conditions, and Restrictions. Cornell Real Estate Review, 1(1), 12-19.

Page 13, Paragraph 2: "In the condominium, individual owners hold title to their individual units... and an undivided interest as a tenant in common in the common areas." This academic source confirms the legal structure of common element ownership.

3. New Jersey Real Estate Commission. (2023). New Jersey Real Estate License Law and Rules. N.J.A.C. 11:5.

While not a direct quote, the principles underlying the regulation of condominiums (e.g., N.J.A.C. 11:5-9.3, Public Offering Statements) are based on the foundational ownership structure defined in the NJ Condominium Act, where unit owners collectively own common elements as tenants in common.

According to the New Jersey Real Estate Commission's advertising rules, a broker is permitted to offer rebates or free/discounted items. However, a critical condition is that the offering cannot be contingent upon the consumer entering into any contract or agreement, such as a listing agreement. In this scenario, the $100 gift certificate is only given to sellers who list their properties with the broker. This creates a prohibited contingency, making the promotion illegal under New Jersey license law. The law is designed to prevent inducements that could improperly influence a consumer's decision to enter into a brokerage relationship.

A. Time-limited promotions are not inherently illegal. The violation is the contingency of signing a listing agreement, not the fact that the offer is for a specific time period.

C. A rebate or gift to a principal in a transaction (the seller) is not considered compensation for brokerage activity. This rule applies to paying unlicensed individuals for performing licensed services.

D. While discrimination is illegal, this is not the primary legal reason for the prohibition in this context. The core violation is the structure of the promotion under specific real estate advertising regulations.

1. New Jersey Administrative Code, Title 11, Chapter 5, Subchapter 6.1(h): "A broker may provide to a consumer a rebate from the commission the broker receives... The payment of the rebate or the providing of the free or discounted product or service shall not be contingent upon the consumer entering into any contract, agreement or transaction." This rule directly prohibits the action described in the question.

2. New Jersey Statutes Annotated (N.J.S.A.) 45:15-17(l): This statute grants the New Jersey Real Estate Commission the authority to suspend or revoke a license for "...making any false promises or any substantial misrepresentation; or... (l) Procuring a license... by fraud, misrepresentation or deceit." The Commission interprets contingent offerings as a form of improper inducement under this authority, as codified in N.J.A.C. 11:5-6.1.

3. Rutgers Center for Real Estate, "New Jersey Real Estate Law and Practice" Course Module: In discussions on licensee conduct and advertising, the courseware emphasizes that while rebates to principals are legal, they cannot be used as an inducement contingent upon the signing of a listing or sale contract, citing N.J.A.C. 11:5-6.1(h) as the controlling regulation.

New Jersey Real Estate Commission rules (N.J.A.C. 11:5-6.9) mandate that a licensee must provide the Consumer Information Statement (CIS) at the time of the first substantive discussion with a prospective buyer. A "substantive discussion" is defined as any dialogue that moves beyond casual introductory remarks to the point of discussing the consumer's specific needs, motivations, or financial qualifications. An inquiry about a specific property's price and terms is unequivocally a substantive discussion, triggering the immediate requirement to provide the CIS. This ensures the consumer understands their agency relationship options before disclosing potentially confidential information.

B. Waiting until an offer is made is a violation, as the disclosure must occur at the first substantive contact, not near the end of the negotiation process.

C. The duty to provide the CIS is a proactive, mandatory obligation of the licensee, not a reactive one dependent on a consumer's request for representation.

D. Providing the CIS at closing is far too late and defeats the entire purpose of the disclosure, which is to inform the consumer at the outset of the relationship.

1. New Jersey Administrative Code, Title 11, Chapter 5, Subchapter 6.9(e): "All licensees shall supply a copy of the Consumer Information Statement... to all sellers, buyers, landlords and tenants... at the time of the first business meeting, or before any discussion of the seller's/landlord's or buyer's/tenant's motivation or financial situation is initiated, whichever occurs first..." (Source: State of New Jersey, Department of Banking and Insurance, Real Estate Commission).

2. New Jersey Real Estate Commission, Real Estate License Law and Rules (N.J.S.A. 45:15-1 et seq. and N.J.A.C. 11:5-1.1 et seq.), Page 102, Section 11:5-6.9(e): This official publication reiterates the requirement for providing the CIS at the first substantive meeting before confidential information is discussed. It clarifies that this is a foundational step in establishing a proper business relationship with the public.

3. Pivar, W. H., & Vitousek, M. L. (2018). Real Estate Principles and Practices for New Jersey (12th ed.). OnCourse Learning. Chapter 5, "Law of Agency," consistently emphasizes that the CIS must be presented at the first meaningful contact to ensure informed consent regarding agency relationships. The text defines this contact as any point where financial or motivational details are discussed.

The value of an income-producing property can be determined using the income capitalization approach. The formula is: Value = Net Operating Income (NOI) / Capitalization Rate. The capitalization rate represents the investor's desired rate of return on their investment. In this scenario, the NOI is $174,000 and the desired capitalization rate is 8% (or 0.08).

Applying the formula:

Value = $174,000 / 0.08 = $2,175,000.

Therefore, a buyer seeking an 8% capitalization rate should be willing to pay $2,175,000 for the building.

A. $139,200 is the result of incorrectly multiplying the NOI by the capitalization rate ($174,000 0.08), which does not yield the property's value.

B. $174,000 is the Net Operating Income (NOI) for one year, not the total value of the property.

C. $1,392,000 is the result of incorrectly multiplying the NOI by 8, rather than dividing by the decimal equivalent of the percentage (0.08).

1. The Appraisal Institute. (2020). The Appraisal of Real Estate (15th ed.). The chapter on "Income Capitalization Approach" details the direct capitalization method, stating the formula as Value = Income / Rate (V=I/R). (Specifically, see Chapter 17, "Direct Capitalization").

2. Brueggeman, W. B., & Fisher, J. D. (2019). Real Estate Finance & Investments (17th ed.). McGraw-Hill Education. Chapter 7, "Valuation of Income Properties: Appraisal and the Real Estate Market," explains that the value of an income property is derived by dividing the Net Operating Income (NOI) by the capitalization rate (Ro).

3. New Jersey Real Estate Commission. (2023). New Jersey Real Estate Reference Guide. Chapter 16, "Appraising and Estimating Market Value," describes the income approach to value, outlining the use of the capitalization rate to convert net operating income into an indication of market value.

New Jersey Administrative Code (N.J.A.C.) 11:5-5.1(g) permits a broker, if so directed in writing by the parties, to retain an earnest-money check un-deposited “until the offer is accepted and the attorney-review period required by N.J.A.C. 11:5-6.2(g) has terminated.” The rule then requires that the funds be placed in the broker’s escrow (trust) account “within five business days after the termination of the attorney-review period.” Therefore, the maximum time the check may legally remain un-deposited is the attorney-review period plus five additional business days, exactly the situation described in option D.

A. Rule allows the check to be held beyond acceptance until attorney review ends; choice omits that additional time, so is incomplete.

B. Inspections occur later and are not recognized by N.J.A.C. 11:5-5.1 as a lawful reason to delay deposit.

C. Five days after receipt applies only when no written instruction to defer exists; rule (g) creates a separate, longer allowance when attorney review applies.

1. New Jersey Administrative Code 11:5-5.1(g), Trust Money, “deposit within five business days after the termination of the attorney-review period.” (2023 ed., pp. 87-88).

2. New Jersey Administrative Code 11:5-6.2(g), Residential Contract–Attorney Review clause requirements (2023 ed., p. 102).

3. New Jersey Real Estate Commission Bulletin, “Escrow/Trust Account Requirements,” May 2019, para. 3-4 (confirms five-day rule after attorney review).

4. Rutgers University Center for Real Estate, “Real Estate Brokerage Regulation” lecture notes, Week 4, slide 9 (summarises N.J.A.C. 11:5-5.1(g) timing).

In New Jersey, an "as-is" clause in a sales contract does not relieve a seller from the legal obligation to disclose known, material latent defects. A latent defect is a fault in the property that is not discoverable by a reasonably prudent inspection. The seller's knowledge of the defect and failure to disclose it constitutes fraudulent concealment or misrepresentation. This action makes the contract voidable at the option of the buyer, who was induced to enter the agreement without knowledge of the true condition of the property. The buyer's primary remedy in this situation is to rescind (void) the contract.

B. can reduce the contract sales price by the cost of correcting the defect.

The buyer cannot unilaterally change the contract terms. While negotiating a price reduction is possible, it is not an automatic right.

C. must go through with the purchase because the house is being sold as is.

The "as-is" clause does not protect a seller from liability for failing to disclose known, material latent defects. This is a well-established legal principle.

D. can force the seller to correct the defect.

This remedy, a form of specific performance for repairs, is not a standard right for the buyer. The primary remedies are rescission of the contract or suing for damages.

1. New Jersey Supreme Court Case Law: The landmark case Weintraub v. Krobatsch, 64 N.J. 445 (1974), established the seller's duty to disclose known, latent defects. The Court held that "deliberate concealment or nondisclosure is the equivalent of actual fraud" and gives the buyer grounds for rescission of the contract.

2. New Jersey Administrative Code: N.J.A.C. 11:5-6.4(b) mandates that real estate licensees "make reasonable effort to ascertain all material information concerning the physical condition of every property for which he or she is retained to market." This reflects the underlying legal duty of disclosure that extends to sellers.

3. University Courseware: In property law courses, such as those based on the principles outlined in the Restatement (Second) of Torts § 551, a seller of real property is liable for nondisclosure of known facts that are not observable by the buyer if they are material to the transaction. This principle is foundational to New Jersey real estate law. (e.g., Course materials on Property Law, Seton Hall University School of Law, often cite Weintraub v. Krobatsch as a key case in seller disclosure obligations).

An exclusive buyer agency agreement establishes the broker as the sole agent representing the buyer for a specified period. The "exclusive" nature of this contract means the broker is entitled to compensation if the buyer purchases a property that meets the criteria outlined in the agreement during its term. This holds true regardless of who finds the property—whether it's the broker, another agent, or the buyer themselves. This provision protects the broker's time and effort invested on the buyer's behalf. The agreement does not restrict the broker from working with other clients.

A. The buyer is the party contractually obligated to pay the commission; while it is often paid via a seller's concession or cooperating broker fee, this is a payment method, not a requirement.

B. The agreement covers any property the buyer purchases that meets the contract's terms, not just properties listed by that specific broker's firm.

D. A broker is permitted to work with multiple buyer clients simultaneously, which includes showing the same property to different clients, while upholding fiduciary duties to all.

1. Galaty, F. W., Allaway, W. J., & Kyle, R. C. (2022). Modern Real Estate Practice (21st ed.). DF Institute, Inc. Chapter 7, "Brokerage Agreements," details the "exclusive buyer representation agreement," specifying that the broker is owed a commission if the buyer purchases a property during the agreement term, regardless of who finds the property.

2. New Jersey Administrative Code, Title 11, Chapter 5, Section 6.9 (N.J.A.C. 11:5-6.9). This regulation requires licensees to provide a Consumer Information Statement (CIS) that defines the role of a buyer's agent as representing the buyer. The terms of compensation in an exclusive agreement are a matter of contract law built upon this foundational agency relationship defined by the state.

3. Jacobus, C. J. (2021). Real Estate Principles (13th ed.). Dearborn Real Estate Education. In the chapter on Agency Contracts, the text clarifies that under an exclusive right-to-represent agreement, the broker earns a commission upon the buyer's purchase of any property within the contract period, affirming the principle in the correct answer.

All listing agreements and sales contracts are the legal property of the brokerage, not the individual salesperson who procured them. The broker of record is legally responsible for maintaining these original documents for a minimum of six years. Permitting a terminated salesperson to remove original contracts would be a direct violation of the New Jersey Real Estate Commission's record-keeping rules (N.J.A.C. 11:5-5.4) and a breach of the broker's fiduciary duty to their clients. The other options describe actions that are explicitly required of the broker upon a salesperson's termination.

A. This is incorrect because New Jersey regulations require the broker to provide the terminated salesperson with a complete written accounting of all monies due within 30 days of termination.

C. This is incorrect because the broker is required to pay any undisputed compensation from transactions closing after termination within ten days of the broker's receipt of the funds from the closing.

D. This is incorrect because in the event of a compensation dispute, the broker must provide the salesperson with a written explanation of their position regarding the disputed amount.

1. New Jersey Administrative Code, Title 11, Chapter 5 (New Jersey Real Estate Commission Rules), N.J.A.C. 11:5-4.3, "Termination of employment of salespersons."

Section (f): "Upon termination of the employment of any salesperson, the employing broker shall provide to the salesperson a complete written account of all monies due the salesperson..." (Supports the requirement in option A).

Section (e): "...the former employing broker shall pay the commission to which the terminated salesperson is entitled within 10 days of the receipt of the funds from the closing." (Supports the requirement in option C).

Section (g): "In the event of a dispute...the broker shall...provide to the salesperson a written explanation of the broker's position with regard to the disputed amount." (Supports the requirement in option D).

2. New Jersey Administrative Code, Title 11, Chapter 5 (New Jersey Real Estate Commission Rules), N.J.A.C. 11:5-5.4, "Records to be maintained by broker."

Section (c): "Every broker shall keep copies of all listings, contracts of sale...and other documents related to any real estate transaction wherein the broker may have an interest for six years." This establishes that these records belong to and must be maintained by the broker, making it improper to allow a salesperson to remove them.

3. Rutgers, The State University of New Jersey, Center for Real Estate. Course materials for the New Jersey Real Estate Salesperson license often cover the New Jersey Administrative Code, emphasizing that all business, including listings and contracts, is conducted in the name of the supervising broker and that all records are the property of the brokerage firm. This principle is foundational to real estate agency law.

According to the New Jersey Real Estate Commission's rules and the fiduciary duties owed to a client, a licensee must disclose any personal or financial interest in a recommended service. A partial ownership in an inspection company constitutes a significant conflict of interest. By disclosing this interest in writing, the licensee provides the client with the necessary information to make an informed, un-coerced decision. This disclosure ensures transparency and upholds the licensee's duty of loyalty and honesty, making the recommendation permissible.

A. Acting in the client's best interest is a primary duty, but it does not eliminate the legal and ethical requirement to disclose a financial conflict.

B. A licensee's ignorance of other service providers is not a valid reason to neglect the mandatory disclosure of a personal financial interest in the recommended company.

C. The duty to disclose a conflict of interest is an affirmative obligation on the licensee; it is not waived if the client fails to ask for alternatives.

1. New Jersey Real Estate Commission, N.J.A.C. 11:5-6.4 (Obligations of licensees to the public and to each other): This section outlines the general duties of licensees. Subsection (d) requires licensees to "deal honestly with all parties." Recommending a company in which the licensee has an undisclosed financial interest would be a breach of this duty of honesty. The principle of disclosing conflicts of interest is a core component of this obligation.

2. New Jersey Real Estate Commission, N.J.S.A. 45:15-17 (Causes for suspension or revocation of license): This statute lists actions that can lead to disciplinary measures. Subsection (e) prohibits "Any conduct which demonstrates unworthiness, incompetency, bad faith or dishonesty." Failing to disclose a significant conflict of interest, such as owning part of a recommended company, could be interpreted as bad faith or dishonest conduct.

3. Jacobus, C. J. (2022). Real Estate Principles (12th ed.). OnCourse Learning. Chapter 10, "Real Estate Agency," discusses the fiduciary duties of an agent, including the duty of loyalty. This duty requires the agent to act solely in the best interest of the principal, free from self-dealing or conflicts of interest. If a conflict is unavoidable, it must be disclosed to the principal, who must then provide informed consent.

The Americans with Disabilities Act (ADA) is a federal civil rights law that mandates accessibility standards for public accommodations and commercial facilities. Listing agents in commercial real estate transactions have a professional and ethical obligation to be knowledgeable about ADA requirements. They must advise property owners on their legal duty to ensure their properties are accessible, which may involve removing architectural barriers or providing reasonable accommodations. Failure to comply with the ADA can lead to significant legal and financial penalties for the owner, making it a critical compliance issue in commercial leasing.

A. their fiduciary responsibilities to the tenant

The listing agent's fiduciary duty is owed to the property owner (the landlord/principal), not to the tenant, who is a customer or third party.

B. state and federal Fair Housing laws

The federal Fair Housing Act primarily applies to residential properties. While some state laws, like New Jersey's Law Against Discrimination, apply to commercial real estate, the ADA is the specific federal law governing disability access in commercial spaces.

D. market lease rates

Advising on market rates is a business practice and part of an agent's duty to the owner, but it is not a legal or regulatory compliance requirement.

1. U.S. Department of Justice, Civil Rights Division. ADA Title III Technical Assistance Manual. Section III-1.2000, "Commercial facilities," and Section III-1.3000, "Public accommodations," define the types of properties covered under the act, which includes the vast majority of commercial real estate.

2. New Jersey Administrative Code. Title 11, Chapter 5, Subchapter 6.4(g). This rule requires licensees to "keep informed of and be conversant with the laws... and developments in the real estate field" and to "exercise of reasonable skill and care in the performance of their functions," which includes knowledge of federal laws like the ADA applicable to the transactions they handle.

3. Ling, D. C., & Archer, W. R. (2021). Real Estate Principles: A Value Approach (7th ed.). McGraw-Hill Education. Chapter 10, "Leases and Property Types," discusses the legal environment of commercial leasing, including the impact and requirements of the Americans with Disabilities Act on commercial property owners and managers.