New Jersey Real Estate Exam Flashcards

Question 1

What disclosure explains agency relationships to consumers in NJ?

Accepted Answer

The Consumer Information Statement (CIS).

Question 2

Where must a New Jersey broker deposit earnest money and other clients' funds?

Accepted Answer

In a separate broker's trust (escrow) account, kept distinct from the broker's personal or business operating funds.

Question 3

What must appear in a New Jersey licensee's real estate advertising?

Accepted Answer

The advertising must include the brokerage firm's name as licensed; a salesperson may not advertise property under only their own name (blind ads are prohibited).

Question 4

Who holds the salesperson's license once it is issued in New Jersey?

Accepted Answer

The employing broker maintains custody of the salesperson's license while the salesperson is affiliated with that broker.

Question 5

Is New Jersey a community-property state?

Accepted Answer

No. New Jersey is not a community-property state.

Question 6

Is New Jersey a community property state?

Accepted Answer

No. New Jersey is not a community property state; it follows equitable distribution principles.

Question 7

How long is the attorney-review period for NJ residential contracts?

Accepted Answer

Three business days, during which either party's attorney may review and disapprove or cancel the contract.

Question 8

How does New Jersey treat property acquired during marriage for ownership purposes?

Accepted Answer

New Jersey is not a community property state; it follows equitable distribution, dividing marital property fairly (not necessarily equally) upon divorce.

Question 9

What core fiduciary duties does a New Jersey agent owe to a client?

Accepted Answer

Care, obedience to lawful instructions, loyalty, disclosure of material facts, confidentiality, and accounting for funds and property.

Question 10

What recovery mechanism protects consumers harmed by NJ licensee misconduct?

Accepted Answer

The New Jersey Real Estate Guaranty Fund, which can reimburse certain consumers who obtain an unsatisfied court judgment against a licensee for fraud or misconduct.

Question 11

Where must client deposit/escrow funds be held in NJ?

Accepted Answer

In the broker's trust (escrow) account, separate from the brokerage's own funds; commingling is prohibited.

Question 12

Under New Jersey case law (Strawn v. Canuso), what must brokers and sellers disclose about off-site conditions?

Accepted Answer

Known off-site physical conditions, such as a nearby hazardous waste landfill, that are material to a reasonable buyer must be disclosed.

Question 13

During New Jersey's 3-business-day attorney-review period, when is the contract binding?

Accepted Answer

It is binding unless an attorney for either party disapproves it in writing within the three business days; if disapproved, the parties may renegotiate or walk away.

Question 14

Whom must a New Jersey salesperson work under?

Accepted Answer

A licensed broker, who supervises the salesperson and is responsible for their activities.

Question 15

Which agency regulates real estate licensees in New Jersey?

Accepted Answer

The New Jersey Real Estate Commission (REC), which operates within the Department of Banking and Insurance (DOBI).

Question 16

Can an unlicensed person legally collect a real estate commission in New Jersey?

Accepted Answer

No. Performing licensed real estate activity without a license is a violation, and an unlicensed person cannot lawfully sue for or collect a commission.

Question 17

What disciplinary actions can the NJ Real Estate Commission take against a licensee?

Accepted Answer

It may revoke or suspend a license, refuse to renew, impose monetary penalties, and order other sanctions for violations of the license law.

Question 18

What duties does a New Jersey licensee owe to a customer (a non-client) in a transaction?

Accepted Answer

Honesty, fair dealing, and disclosure of known material defects affecting the property; not the full fiduciary loyalty owed to a client.

Question 19

Which New Jersey agency regulates real estate licensees, and under what department does it operate?

Accepted Answer

The New Jersey Real Estate Commission (REC), which operates within the Department of Banking and Insurance (DOBI).

Question 20

What consent is required for disclosed dual agency in New Jersey?

Accepted Answer

The informed, written consent of both the buyer and the seller.

Question 21

What is commingling, and is it permitted for a New Jersey broker?

Accepted Answer

Commingling is mixing clients' trust funds with the broker's own money; it is prohibited and a basis for license discipline.

Question 22

Which agency regulates real estate licensing in New Jersey?

Accepted Answer

The New Jersey Real Estate Commission (REC), a division within the Department of Banking and Insurance (DOBI).

Question 23

Under New Jersey law, what is disclosed dual agency?

Accepted Answer

When a firm or licensee represents both buyer and seller in the same transaction, permitted only with the informed written consent of both parties.

Question 24

How long is New Jersey's attorney-review period for standard residential real estate contracts prepared by a broker or salesperson?

Accepted Answer

Three business days, during which either party's attorney may review and disapprove or modify the contract.

Question 25

How often must New Jersey real estate licenses be renewed?

Accepted Answer

NJ real estate licenses are renewed on a two-year cycle.

Question 26

What are the two main license levels issued by the NJ Real Estate Commission?

Accepted Answer

Salesperson and broker (with broker-salesperson as an additional category for those holding broker qualifications while working under another broker).

Question 27

What generally must a claimant do before recovering from the NJ Real Estate Guaranty Fund?

Accepted Answer

Obtain a final court judgment against the licensee, attempt to collect it, and show the judgment remains unsatisfied before applying to the fund.

Question 28

What is the Consumer Information Statement (CIS) in New Jersey?

Accepted Answer

A disclosure form licensees must present and explain to consumers describing the types of business relationships (agency) available in a NJ real estate transaction.

Question 29

Under whom must a New Jersey real estate salesperson work?

Accepted Answer

A salesperson must be employed by and work under the supervision of a licensed New Jersey broker.

Question 30

When a dispute arises over escrowed deposit money in New Jersey, what should the broker do with the funds?

Accepted Answer

Hold the disputed funds in the trust account and not release them until the parties agree in writing or a court directs disbursement; the broker must not unilaterally decide entitlement.

Question 31

What experience does NJ require before a salesperson can become a broker?

Accepted Answer

Active, full-time licensure and experience as a salesperson for the required period (generally three years) plus completion of broker prelicensure education.

Question 32

What are the recognized business relationships a New Jersey licensee may have with a consumer under the CIS?

Accepted Answer

Seller's agent, buyer's agent, disclosed dual agent, and transaction broker (a non-agency facilitator).

Question 33

In New Jersey, may a licensee advertise a specific listed property without the owner's consent?

Accepted Answer

No; a licensee must have the property owner's authorization (a listing or written consent) before advertising the property for sale or rent.

Question 34

Must NJ continuing education include any required core topics?

Accepted Answer

Yes. A portion of the 12 CE hours must be in required core topics such as ethics, fair housing/agency law, and similar mandated subjects, with the remainder in electives.

Question 35

What happens if a NJ licensee fails to complete CE or renew on time?

Accepted Answer

The license may lapse or be placed on inactive/expired status, and the licensee cannot conduct real estate activity until CE is completed and the license is properly renewed or reinstated.

Question 36

In New Jersey, what is a transaction broker?

Accepted Answer

A licensee who works to facilitate a transaction without representing either party as an agent and without owing the fiduciary loyalty owed to a client.

Question 37

In New Jersey, what document must a licensee provide to a consumer at first contact to explain the available types of business relationships (agency)?

Accepted Answer

The Consumer Information Statement (CIS), which describes seller's agent, buyer's agent, disclosed dual agent, and transaction broker relationships.

Question 38

How must a New Jersey broker maintain transaction records, and for how long generally?

Accepted Answer

The broker must keep complete records of each transaction, including contracts, agency disclosures, and trust account records, available for Commission inspection, generally retained for six years.

Question 39

How many continuing education (CE) hours must NJ licensees complete each renewal cycle?

Accepted Answer

12 hours of approved continuing education per two-year license cycle.

Question 40

How long is the attorney-review period on a standard NJ real estate contract?

Accepted Answer

3 business days.

Question 41

How many hours of pre-licensing education are required for a NJ salesperson?

Accepted Answer

75 hours of approved pre-licensing education.

Question 42

How many hours of prelicensure education are required to become a NJ salesperson?

Accepted Answer

75 hours of approved real estate prelicensure education.

Question 43

What is commingling, and why is it prohibited for NJ licensees?

Accepted Answer

Commingling is mixing clients' trust/escrow funds with the broker's own funds; it is prohibited and grounds for discipline because client money must be held separately.

Question 44

Who may a New Jersey salesperson lawfully accept compensation from for real estate brokerage services?

Accepted Answer

Only from their own sponsoring broker; a salesperson may not be paid directly by a buyer, seller, or another broker.

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