Consumer Information Statement (CIS): required agency-relationship disclosure.
Before you read
Test yourself first: 5 questions
Question 1 of 5
Which of the following actions by a New Jersey licensee would most likely subject the license to suspension or revocation by the REC?
Answer: B. Commingling client/escrow funds with the broker's own funds is a serious violation of New Jersey license law and grounds for disciplinary action, including suspension or revocation. The other choices describe required or proper conduct.
Question 2 of 5
How long must a New Jersey broker generally retain transaction and brokerage records for Commission review?
Answer: B. New Jersey brokers must retain transaction and trust-account records for the period required by the Commission and produce them upon request. The exact period is set by regulation; the key principle is mandatory retention and availability for inspection.
Question 3 of 5
A New Jersey broker receives a buyer's earnest money deposit. How must these funds generally be handled?
Answer: C. New Jersey brokers must deposit and maintain clients' funds, such as earnest money, in a separate trust or escrow account, keeping them apart from the broker's own operating funds.
Question 4 of 5
Commingling, as prohibited by the New Jersey Real Estate Commission, refers to:
Answer: B. Commingling is the improper mixing of clients' escrow/trust funds with the broker's own money. New Jersey requires that such funds be kept separate in a dedicated trust account.
Question 5 of 5
A New Jersey salesperson keeps an earnest money deposit in his personal checking account rather than turning it over to his broker for the broker's trust account. This conduct is best described as:
Answer: A. Mixing client or escrow money with personal funds is commingling, and using it for personal purposes is conversion. Deposits must be promptly delivered to the broker and held in the broker's trust (escrow) account. Both are serious license-law violations subject to disciplinary action by the REC.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Attorney-review period on standard NJ contracts: 3 business days.
- Consumer Information Statement (CIS): required agency-relationship disclosure.
- Client deposit and escrow funds are held in the broker's trust account.
- Commingling client funds with brokerage operating funds is prohibited.
- Known material property defects should be disclosed to buyers.
- New Jersey is NOT a community-property state.
- Regulator for disclosure and escrow rules: NJ Real Estate Commission (REC), within DOBI.
New Jersey Required Disclosures & Escrow/Trust Timeframes: FAQs
Is New Jersey Required Disclosures & Escrow/Trust Timeframes on the real estate exam?
Yes. State License Law is a scored domain on the New Jersey real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does New Jersey test this differently?
New Jersey applies its own license law on top of the national portion. This page covers the New Jersey rules specifically, which is what the state section of your exam tests.
