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Somerset and Central New Jersey Living

Feb. 9, 2010 - Commission rebates come to New Jersey

New regulations are still being formed

 

I first informed you on January 19th of new real estate legislation that was signed into law by the outgoing Governor Corzine.  On January 17, 2010, P.L. 2009, c. 273 (“the Act”) was signed into law. The Act permits licensed real estate brokers to provide a purchaser of residential real property a rebate from the commission the broker receives. The law is effective immediately and is a significant change to prior New Jersey law. The Real Estate Commission intends to promulgate regulations to effectuate the provisions of this law. In the meantime, however, the Real Estate Commission urges real estate licensees to be guided by the provisions of the Act and by this bulletin.

 

Below is a summary of several restrictions on who may provide and receive a rebate, conditions concerning the providing of a rebate, limitations on the nature of the rebate that may be paid and requirements on the advertisement of rebates. 

 

Who may provide/receive a rebate and conditions concerning the providing of a rebate.

  • Only a real estate broker may provide the rebate. A broker-salesperson or salesperson may not provide a rebate.
  • A rebate may only be provided to a purchaser of residential real property. A rebate may not be provided to a seller or to a lessor or lessee.
  • The broker and the purchaser must contract for a rebate at the onset of the brokerage relationship in a written document, an electronic document or a buyer agency agreement. The document or agreement must specify the terms of any rebate to be credited or paid by the broker to the purchaser. The broker must provide the document or agreement to the purchaser at the outset of the brokerage relationship.
  • The broker must comply with any State or federal requirements regarding the disclosure of the payment of the rebate.
  • The broker must recommend to the purchaser that the purchaser contact a tax professional concerning the tax implications of receiving the rebate.
  • The broker must disclose the payment of the rebate to all parties involved in the transaction, including any mortgage lender.

The nature of the rebate that may be paid.

  • The rebate must be -

+ in the form of a credit to the purchaser and reducing the amount of the commission payable to the broker paying the rebate or a check paid by the closing agent made at the time of closing;

+ and calculated after the purchaser negotiates the rebate commission rate with the broker paying  the rebate.

  • The rebate must not be -

+ paid to an unlicensed person for any act that requires licensure;

 

+ contingent upon the use of other services or products being offered by a broker or an affiliate of a broker; and

+ based on the use of a lottery, contest or game.

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08873 is the Postal Code for Franklin Township in Somerset County, NJ and we love living here. Hi, I'm Mike Adams and this is a Real Estate blog for and about Franklin Township, Somerset and Central New Jersey Living. I would love to help you with your central NJ real estate needs. Just contact me via phone, text, my websites or email. I invite your comments and please visit Somerset 08873 often. Get Somerset08873 Blog on your Mobile Phone - **winksite.mobi/SOMERSET0887/Homes** Michael Adams Keller Williams Cornerstone Realty 2230 Route 206, Belle Mead, New Jersey 08503 Business: 908.359.0893 Mobile/Text: 908.583.0409 Fax: 908.359.3929 mjadams629@gmail.com

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