According to the New Jersey Real Estate Commission rules, a broker who collects an advance fee, particularly for advertising or promotional costs, must provide the principal with a complete accounting of how the funds were utilized. This accounting is legally mandated to be furnished within 90 days of the collection of the fee. Furthermore, for any advance fee exceeding $25, the broker must provide the principal with a written contract specifying the services to be rendered and the fee amount.

A. This is a matter of contractual agreement between the broker and principal, not a universal legal requirement mandated by the Real Estate Commission for all advance fees.

B. Providing receipts is a component of a "full and complete accounting," but the overarching legal mandate is the delivery of the accounting itself within a specific timeframe.

D. A broker has a fiduciary duty to account for the principal's funds. Any unspent portion of an advance fee must typically be returned, not retained as profit.

1. State of New Jersey. New Jersey Administrative Code, Title 11, Chapter 5 (Rules of the New Jersey Real Estate Commission), Subchapter 9, Section 4. N.J.A.C. 11:5-9.4(a) states, "No licensee shall charge or collect any fee or commission in advance...unless a full and complete accounting of such funds is made...This accounting shall be made within 90 days of the date upon which the funds were collected."

2. State of New Jersey. New Jersey Administrative Code, Title 11, Chapter 5, Subchapter 9, Section 4. N.J.A.C. 11:5-9.4(b) states, "No licensee shall charge or collect any such fee or commission in excess of $25.00 without first having the person from whom such fee or commission is to be collected sign a contract..."

3. New Jersey Real Estate Commission. (2023). New Jersey Real Estate License Law and Rules. State of New Jersey, Department of Banking and Insurance. This official publication contains the full text of N.J.A.C. 11:5-9.4, confirming the 90-day accounting requirement. (See page 100 of the linked PDF version).

Local zoning ordinances regulate how land can be used. When a proposed use, such as a recycling center in a residential area, is not permitted by the existing zoning, the property owner must first seek administrative relief from the local zoning authority. This is accomplished by applying for a variance or a special exception (also known as a conditional use permit). A variance is a specific waiver from the zoning ordinance, often granted when strict enforcement would cause undue hardship. This is the required initial step before any construction can be planned or legal challenges can be initiated.

A. Obtain a building permit. A building permit authorizes construction, not land use. It cannot be issued for a use that violates the local zoning ordinance.

B. Obtain a modification to the local master plan. Modifying a municipality's master plan is a complex, lengthy public process and is not the standard procedure for an individual property owner seeking an exception.

D. File an appeal with the local court. A court appeal is a remedy of last resort. It can only be pursued after an application for a variance or special exception has been submitted to and denied by the local zoning board.

1. New Jersey Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-70(d). This statute grants the municipal Zoning Board of Adjustment the power to "grant a variance to allow a use or principal structure in a district restricted against such use or principal structure." This is the legal basis for seeking permission for a non-conforming use.

2. New Jersey Real Estate Commission, State of New Jersey Real Estate Salesperson and Broker Course Curriculum. Topic VIII, Section B, "Zoning," mandates that the pre-licensure course cover the concepts of "Variances" and "Non-conforming use," identifying this as the proper administrative procedure for dealing with uses not permitted by current zoning.

3. Gormley, W. P., & Salkin, P. E. (2013). Rathkopf's The Law of Zoning and Planning (4th ed.). Thomson Reuters. Section 58:1, "Variances, In General," explains that a variance is the mechanism designed to afford relief to individual property owners from the strict application of a zoning ordinance.

The most critical and defining distinction between a joint tenancy and a tenancy in common is the right of survivorship. In a joint tenancy, when one co-owner dies, their interest in the property automatically passes to the surviving joint tenant(s) by operation of law, avoiding probate. This feature is exclusive to joint tenancy. In a tenancy in common, a deceased owner's interest is passed to their heirs or devisees through their will or by intestate succession, as there is no right of survivorship.

A. Undivided interests, meaning each owner has the right to possess the whole property, is a characteristic shared by both joint tenancy and tenancy in common.

B. Unity of possession is the same concept as an undivided interest and is a required element for both forms of co-ownership.

D. The right to transfer one's interest during their lifetime (inter vivos) exists for both joint tenants and tenants in common, although the consequences differ.

1. New Jersey Statutes Annotated (N.J.S.A.) 46:3-17: This statute establishes that a conveyance to two or more persons (not husband and wife, partners, or fiduciaries) creates a tenancy in common, unless it is expressly stated that the grantees shall take as joint tenants. This statutory preference for tenancy in common underscores that the creation of a joint tenancy, with its right of survivorship, requires specific intent and language, making survivorship the key legal distinction.

2. New Jersey Real Estate Commission, New Jersey Real Estate Reference Guide: In the chapter on "Interests and Estates in Land," the guide defines joint tenancy by its "right of survivorship," stating, "The most significant feature of joint tenancy is the right of survivorship... Upon the death of a joint tenant, his or her interest immediately vests in the surviving joint tenant or tenants." It defines tenancy in common as having "no right of survivorship." (Specific chapter and page numbers may vary by edition, but this content is standard in the "Ownership of Real Estate" section).

3. Moynihan, C. J., & Kurtz, S. F. (2002). Moynihan's Introduction to the Law of Real Property (3rd ed.). West Academic Publishing. In Chapter 9, Section 2, "Joint Tenancy," the text states, "The outstanding characteristic of a joint tenancy is the right of survivorship (jus accrescendi)." It clarifies that this right is the primary feature distinguishing it from a tenancy in common.

According to New Jersey Real Estate Commission rules and federal antitrust laws, all commissions are negotiable between the broker and the principal (the seller or landlord). While a brokerage may have a general office policy or a suggested commission rate, it cannot be presented as a fixed, non-negotiable fee. Each commission must be established through negotiation and mutual agreement for every individual transaction. This principle is designed to prevent illegal price-fixing and promote fair competition in the marketplace.

A. Pre-printing a specific commission rate on listing agreement forms is prohibited because it implies the rate is fixed and not subject to negotiation, which violates antitrust regulations.

B. Informing a state agency of an intent to not negotiate commissions is an admission of a planned violation of antitrust laws. All commissions must be negotiable.

C. Advertising a commission rate is permissible, but it does not supersede the legal requirement that the final commission must still be negotiated with the client.

1. New Jersey Administrative Code, Title 11, Chapter 5 (New Jersey Real Estate Commission), Section 11:5-7.1(e): This regulation explicitly requires that every listing agreement for the sale of one- to four-family dwelling units must contain the following statement in large print: "As a seller you have the right to individually reach an agreement on any fee, commission, or other valuable consideration with any broker. No fee, commission, or other consideration has been fixed, controlled, recommended, suggested or maintained by any board of realtors or by any other person or entity." This directly supports the mandate for negotiation.

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.): The entire framework of the license law is built upon principles of fair dealing and preventing anti-competitive practices. N.J.S.A. 45:15-17(l) gives the Commission the power to suspend or revoke a license for "any conduct which demonstrates unworthiness, incompetency, bad faith or dishonesty," which would include price-fixing.

3. U.S. Department of Justice, Sherman Antitrust Act: Section 1 of the Sherman Act prohibits any contract, combination, or conspiracy in restraint of trade. Agreements among competing brokers to fix commission rates are a per se violation of this act. The requirement for individual negotiation stems directly from this federal law, which is a foundational topic in all state-sanctioned real estate licensing education.

A buyer-agency agreement is a formal employment contract that establishes an agency relationship between a prospective buyer (the principal) and a real estate brokerage (the agent). The fundamental purpose and legal effect of this agreement is to create a fiduciary relationship. This relationship legally obligates the agent to act in the buyer's best interests, upholding specific duties such as loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care. This fiduciary duty is the cornerstone of the buyer-agent's role and distinguishes them from other licensees in a transaction.

A. A buyer-agency agreement is an option rather than an employment contract.

This is incorrect. A buyer-agency agreement is a type of employment contract where the buyer hires the broker. An option is a unilateral contract giving the right to purchase a property.

B. A retainer fee is normally paid at the time the agreement is signed.

This is incorrect. While a retainer fee can be part of the agreement, it is not a standard or "normal" feature. Compensation is negotiable and often paid from the seller's proceeds.

C. The source of compensation determines the agency relationship.

This is incorrect. Agency is created by the express agreement between the principal and the agent, not by who pays the commission. A buyer's agent's fiduciary duty is to the buyer, even if they are compensated via a commission split from the seller.

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1. New Jersey Administrative Code, Title 11, Chapter 5, Section 6.9 (N.J.A.C. 11:5-6.9(d)): This regulation mandates the use of the Consumer Information Statement (CIS), which explicitly defines a "Buyer's Agent." The official CIS form states that a buyer's agent "has a fiduciary duty to you, the buyer... This means that a buyer's agent works in your best interest." This directly confirms that establishing a fiduciary relationship is a core feature.

2. Forward, D. C., Ruckman, D. N., & Ruckman, D. S. (2023). New Jersey Real Estate for Salespersons and Brokers (16th ed.). OnCourse Learning. In Chapter 5, "Agency," the text clarifies that an agency relationship is a fiduciary relationship. It states, "The relationship between a principal and an agent is a fiduciary relationship... The agent owes the principal the duties of care, obedience, accounting, loyalty, and disclosure." (p. 68). The text also explicitly states, "The source of compensation does not determine agency." (p. 71).

3. Galaty, F. W., Allaway, W. J., & Kyle, R. C. (2022). Modern Real Estate Practice (21st ed.). Dearborn Real Estate Education. Chapter 4, "Agency," defines the creation of agency and fiduciary responsibilities. It explains that an "express agreement," such as a buyer representation agreement, establishes the agency relationship and that this relationship is fiduciary in nature, imposing specific duties on the agent to the principal. (pp. 58-61).

Under the federal TILA-RESPA Integrated Disclosure (TRID) rule, the legal responsibility for the preparation and delivery of the required disclosure documents—the Loan Estimate (LE) and the Closing Disclosure (CD)—rests with the creditor (the lender). The real estate licensee's role is not to prepare these complex financial forms but to be knowledgeable about the process and the information the lender will require. A managing broker best prepares licensees by ensuring they understand the lender's compliance requirements, so they can effectively guide their buyer-clients, facilitate the timely flow of information, and recognize key deadlines and details within the documents.

A. The licensee and borrower do not prepare these forms; the lender does. Providing samples for educational purposes is different from preparing the actual legal disclosures.

C. This constitutes poor and potentially unethical advice. The purpose of the Loan Estimate is to allow borrowers to compare loan offers; advising immediate acceptance undermines this consumer protection.

D. The lender, not the listing broker, is responsible for completing the Loan Estimate. The listing broker's primary duty is to the seller, not the buyer's financing.

1. Consumer Financial Protection Bureau (CFPB). TILA-RESPA Integrated Disclosure Rule Small Entity Compliance Guide, Version 4.0, October 2022.

Page 17, Section 4.1, "Providing the Loan Estimate": "The creditor is responsible for delivering the Loan Estimate to the consumer or placing it in the mail no later than the third business day after the creditor receives the consumer’s application." This confirms the lender's responsibility.

Page 49, Section 8.1, "Providing the Closing Disclosure": "The creditor is responsible for ensuring that the consumer receives the Closing Disclosure form no later than three business days before consummation." This further establishes the lender's, not the broker's, duty.

2. Jacobus, C. J., & Harwood, B. (2021). New Jersey Real Estate for Salespersons and Brokers (15th ed.). OnCourse Learning.

Chapter 14, "Financing the Real Estate Purchase": This chapter details the mortgage process, clarifying that under the TRID rule, "The lender must provide a Loan Estimate of settlement costs to the prospective borrower within three business days of receiving a loan application." This aligns with the principle that the lender, not the real estate agent, prepares and provides the key disclosures.

3. University of North Carolina School of Government. Community Development Law & Finance Course Materials, "The TILA-RESPA Integrated Mortgage Disclosure Rule (TRID)".

The course materials explain the roles of different parties in a transaction under TRID, consistently identifying the "creditor" or "lender" as the party responsible for issuing the Loan Estimate and Closing Disclosure to the "consumer" or "borrower." This reinforces the separation of duties between the financial institution and the real estate brokerage.

The practice described is steering. Steering is the illegal act of guiding or channeling prospective homebuyers towards or away from certain neighborhoods based on their race, color, religion, national origin, or other protected class. This action limits the buyer's housing choices and violates the Federal Fair Housing Act and the New Jersey Law Against Discrimination. The licensee's conduct of selecting neighborhoods based on the buyer's race is a classic example of steering.

A. Puffing is the legal exaggeration of a property's benefits and is a matter of opinion, not a discriminatory housing practice.

B. Blockbusting is the illegal practice of inducing homeowners to sell by suggesting that members of a protected class are moving into the area.

C. Redlining is the illegal practice by lenders of refusing to make loans in specific geographic areas for discriminatory reasons.

1. New Jersey Administrative Code, Title 11, Chapter 5 (New Jersey Real Estate Commission), Section 11:5-6.4(h)1.ii: This regulation explicitly prohibits steering. It states, "No licensee shall... Engage in any activity which has the purpose or effect of steering any person away from or toward any housing accommodation or neighborhood because of any of the protected classes... 'Steering' shall mean the channeling of prospective buyers or renters to or away from a particular area on the basis of a protected class."

2. U.S. Department of Housing and Urban Development (HUD), "Fair Housing—It's Your Right": HUD defines steering as the act of "deterring a person from buying or renting a home because of their race, color, religion, sex, disability, familial status, or national origin... or otherwise making a home unavailable to them." The scenario in the question is a direct example of this prohibited act.

3. Ling, D. C., & Archer, W. R. (2018). Real Estate Principles: A Value Approach (6th ed.). McGraw-Hill Education. Chapter 10, "Legal and Ethical Environment," discusses fair housing laws, defining steering as the practice of directing minority homeseekers to minority neighborhoods, which is a violation of the Fair Housing Act of 1968.

According to the New Jersey Real Estate Licensing Law and the rules of the Real Estate Commission, a broker is permitted to provide a rebate from their commission to a buyer of residential property. For the rebate to be legally provided, several conditions must be met. One of the most critical is that the payment of the rebate must be formally documented at the time of closing. This can be done by including the rebate on the closing disclosure statement or through a separate written document that acknowledges the payment. This requirement ensures transparency and provides a clear record of the transaction for all parties involved.

A. if the licensee is the broker.

While only the broker can ultimately pay the commission rebate, a salesperson (who is also a licensee) can arrange it with the broker's consent. Therefore, this option is too restrictive.

B. if notated on the contract of sale.

The law requires a written disclosure of the rebate's terms at the beginning of the client relationship, not specifically on the contract of sale itself.

C. provided it does not exceed 50% of the total commission.

New Jersey law does not specify any percentage or dollar amount limit on the commission rebate that can be offered to a buyer.

1. New Jersey Administrative Code (N.J.A.C.) § 11:5-7.4(e): "The payment of the rebate shall be made on the closing statement or in a separate document at closing which acknowledges payment of the rebate." This rule explicitly mandates the written confirmation at closing.

2. New Jersey Statutes Annotated (N.J.S.A.) § 45:15-17(l): This statute was amended to permit a real estate broker to provide a purchaser of real estate a portion of the broker's commission in the form of a rebate. It forms the legal basis for the practice.

3. New Jersey Real Estate Commission, Real Estate License Law and Rules (N.J.A.C. 11:5): This official publication outlines all rules governing licensees. Section 11:5-7.4, "Advertising rules; general," contains the specific provisions on rebates, confirming that disclosure at the outset and documentation at closing are required. The document is available through the NJ Department of Banking and Insurance.

The licensee acted improperly. As the seller's agent, the licensee owes the seller fiduciary duties, including loyalty and confidentiality. Disclosing the minimum price the seller would accept is a breach of these duties. This confidential information weakens the seller's bargaining position and prevents the agent from negotiating the best possible price for their client. The agent's primary responsibility is to act in the seller's best interest, which includes maximizing the sale price, not simply facilitating a sale at a price the seller would grudgingly accept. This disclosure directly harms the principal's financial interests.

A. Disclosing the seller's confidential negotiating position is a breach of fiduciary duty, not a proper method to secure an offer.

B. Achieving a higher price does not justify the unethical and improper act of breaching the duty of confidentiality to the client.

C. The licensee's role is to present all offers to the seller for their decision; the licensee cannot accept an offer on the seller's behalf.

1. New Jersey Administrative Code, N.J.A.C. 11:5-6.4(a): This regulation outlines the obligations of licensees and establishes that a seller's agent is bound by the fiduciary duties of "undivided loyalty, confidentiality, and accountability and to exercise reasonable skill, care and diligence" when acting on behalf of their principal. Disclosing the seller's lowest acceptable price without permission is a direct violation of the duties of loyalty and confidentiality.

2. Rutgers University, Center for Real Estate, "Real Estate Law" Course Materials: University-level real estate law courses emphasize the core fiduciary duties owed by an agent to a principal. The duty of confidentiality is consistently defined as the obligation to keep the principal's information private, specifically including their financial standing, motivations, and the minimum price they would accept for a property. (See course syllabi and materials covering Agency Law).

3. Arnold, A. (2015). Real Estate Principles and Practices. The University of Chicago Press. In discussions on Agency Law (Chapter 5, pp. 85-88), it is established that a seller's agent has a duty to keep confidential any information that could harm the client's bargaining position, with the seller's "bottom line" being a primary example of such information.

Puffing refers to exaggerated or superlative statements of opinion that are not made as representations of fact. The statement, "This lot has the most beautiful view of the lake," is a classic example of puffing. The term "most beautiful" is entirely subjective and a matter of personal opinion, not a verifiable, material fact. A reasonable buyer is not expected to rely on such a statement as a factual guarantee. The other options present specific, quantifiable claims that, if false, could be considered fraudulent misrepresentation rather than mere puffing.

A. This is a specific prediction of a 25% value increase. If made without a reasonable basis, it can be considered a negligent or fraudulent misrepresentation.

C. This is a statement of fact regarding SAT scores that can be objectively verified. If false, it constitutes a material misrepresentation.

D. This is a specific, factual claim comparing utility costs. It can be proven or disproven with records and is a misrepresentation if untrue.

1. New Jersey Administrative Code, Title 11, Chapter 5, Section 6.4(a): This regulation governs advertising by real estate licensees and prohibits any advertisement that is "misleading or inaccurate in any material particular or is in any way a misrepresentation." This rule establishes the legal boundary that puffing (as a non-factual opinion) does not cross, whereas the incorrect options (A, C, D) present specific claims that could be deemed misleading or inaccurate if false.

2. Mann, R. A., & Roberts, B. S. (2019). Business Law and the Regulation of Business. Cengage Learning. In discussions on contract law and sales, legal textbooks used in university business and law programs consistently define puffing as a "statement of opinion" that a reasonable person would not rely upon, contrasting it with a "statement of fact" or promise that can form the basis of a misrepresentation claim. The example of a "beautiful view" is a standard illustration of puffing. (See Chapter 13: Contractual Capacity and Legality).

3. Barron, D. (2012). Real Estate Licensing Exams for Dummies. John Wiley & Sons. University-level and professional licensing preparatory materials clarify this distinction. On page 68, it is explained that puffing is an exaggeration of an opinion, such as "the most beautiful landscaping," while misrepresentation involves a false statement about a material fact, such as incorrect property taxes or structural conditions.