Consumer Information Statement
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The Statement must be given to prospective clients and customers in transactions involving: The sale of one to four family residential properties or vacant one-family lots. Residential lease transactions other than short term rentals (short term rental Means the rental of residential property for not more than 90 consecutive days). What must be done:1) Inform buyer/seller – lessee/landlord of the four business relationships: To the Buyer: a) verbally– prior to the first discussion at which the buyer’s motivation or financial ability to buy is discussed. b) written – give the Consumer Information
Statement at first business To the Seller: a) verbally – prior to the first discussion
of the seller’s motivation to sell and b) written – Consumer Information Statement at first business meeting prior to discussion of motivation or of desired selling price. c) unlisted properties – not later than the first showing. 2) Brokerage Agreements (listings buyer-agent agreements, etc.) must contain: a) The business relationship the firm intends to have with the other party to the agreement (mandated language). b) Statement acknowledging receipt of the Consumer Information Statement. 3) All offers, contracts or leases prepared by licensees must contain: a) The business relationship the firm has with respect to the parties named in those documents (mandated language). b) Statement acknowledging receipt of the Consumer
Information Statement Miscellaneous:
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11:5 –1.43 - - Consumer Information Statement (a) When applied to rental transactions which are not exempt from this rule, references to sellers and buyers, and to the various types of brokerage agreements and business relationships mentioned throughout this rule should be construed as indicating their appropriate counterparts in rental transactions. For example, references to sellers should be read as lessors or owners and references to buyers should be read as lessees or tenants, etc. As used in this rule, the following terms or phrases shall have the following meanings:
(a) Prior to acting as a dual agent, a brokerage firm must have the written informed consent of the parties to the transaction. Informed consent is not acquired through distribution of the Consumer Information Statement on New Jersey Real Estate Relationships as required by (e) and (k) below alone. At a minimum, licensees must also secure the signature of the party on a separate writing which confirms the party’s informed consent to the licensee acting as a Disclosed Dual Agent for that party. Such a writing may be part of, or an attachment to, a brokerage agreement. (b) Licensees shall supply information with regard to their working relationship with parties to real estate transactions as provided in this rule. (c) Licensees shall comply with all requirements of this rule when involved in:
(d) All licensees shall supply information on business relationships to buyers and sellers in accordance with the following: 1. With respect to buyers:
2. With respect to sellers:
(f) The purpose of (e) above and (h) below, is to require licensees to provide basic and introductory information to the public in a convenient and consistent manner, rather than a comprehensive explanation of agency law. (g) The statement as supplied by the Commission shall be reproduced and delivered by licensees as required in this section, as a separate item, with no deletions or additions, other than the optional additional text referred to in (g) 1 and 2 below, and recited in (h) below.
(h) The mandatory text of the Consumer Information Statement to be delivered by licensees as provided in (e) above is as follows: CONSUMER INFORMATION STATEMENT ON NEW JERSEY REAL ESTATE RELATIONSHIPS In New Jersey, real estate licensees are required to disclose how they intend to work with buyers and sellers in a real estate transaction. (In rental transactions, the terms "buyers" and "sellers" should be read as "tenants" and "landlords," respectively.) 1. AS A SELLER’S AGENT OR SUBAGENT, I , AS A LICENSEE, REPRESENT THE SELLER AND ALL MATERIAL INFORMATION SUPPLIED TO ME BY THE BUYER WILL BE TOLD TO THE SELLER. 2. AS A BUYER’S AGENT, I, AS A LICENSEE, REPRESENT THE BUYER AND ALL MATERIAL INFORMATION SUPPLIED TO ME BY THE SELLER WILL BE TOLD TO THE BUYER. 3. AS A DISCLOSED DUAL AGENT, I, AS A LICENSEE REPRESENT BOTH PARTIES. HOWEVER, I MAY NOT, WITHOUT EXPRESS PERMISSION, DISCLOSE THAT THE SELLER WILL ACCEPT A PRICE LESS THAN THE LISTING PRICE OR THAT THE BUYER WILL PAY A PRICE GREATER THAN THE OFFERED PRICE. 4. AS A TRANSACTION BROKER, I, AS A LICENSEE, DO NOT REPRESENT EITHER THE BUYER OR THE SELLER. ALL INFORMATION I ACQUIRE FROM ONE PARTY MAY BE TOLD TO THE OTHER PARTY. Before you disclose confidential information to a real estate licensee regarding a real estate transaction, you should understand what type of business relationship you have with that licensee. There are four business relationships: (1) seller’s agent; (2) buyer’s agent; (3) disclosed dual agent; and (4) transaction broker. Each of these relationships imposes certain legal duties and responsibilities on the licensee as well as on the seller or buyer represented. These four relationships are defined in greater detail below. Please read carefully before making your choice. SELLER’S AGENT A seller’s agent WORKS ONLY FOR THE SELLER and has legal obligations, called fiduciary duties, to the seller. These include reasonable care, undivided loyalty, confidentiality and full disclosure. Seller’s agents often work with buyers, but do not represent the buyers. However, in working with buyers, a seller’s agent must work honestly. In dealing with both parties, a seller’s agent may not make any misrepresentations to either party on matters material to the transaction, such as they buyer’s financial ability to pay, and must disclose defects of a material nature affecting the physical condition of the property which a reasonable inspection by the licensee would disclose. Seller’s agents include all persons licensed with the brokerage firm which has been authorized through a listing agreement to work as the seller’s agent. In addition, other brokerage firms may accept an offer to work with the listing broker’s firm as the seller’s agents. In such cases those firms and all persons licensed with such firms, are called "sub-agents". Sellers who do not desire to have their property marketed through sub-agents should so inform the seller’s agent. BUYER’S AGENT A buyer’s agent WORKS ONLY FOR THE BUYER. A buyer’s agent has fiduciary duties to the buyer which include reasonable care, undivided loyalty, confidentiality, and full disclosure. However, in dealing with sellers, a buyer’s agent must act honestly. In dealing with both parties, a buyer’s agent may not make any misrepresentations on matters material to the transaction, such as the buyer’s financial ability to pay, and must disclose defects of a material nature affecting the physical condition of the property which a reasonable inspection by the licensee would disclose. A buyer wishing to be represented by a buyer’s agent is advised to enter into a separate written buyer agency contract with the brokerage firm which is to work as their agent. DISCLOSED DUAL AGENT A disclosed dual agent WORKS FOR BOTH THE BUYER AND THE SELLER. To work as a dual agent, a firm must first obtain the informed written consent of the buyer and the seller. Therefore, before acting as a disclosed dual agent, brokerage firms must make written disclosures to both parties. Disclosed dual agency is most likely to occur when a licensee with a real estate firm working as a buyer’s agent shows the buyer properties owned by sellers for whom that firm is also working as a seller’s agent or subagent. A real estate licensee working as a disclosed dual agent must carefully explain to each party that, in addition to working as their agent, their firm will also work as the agent for the other party. They must also explain what effect their working as a disclosed dual agent will have on the fiduciary duties their firm owes to the buyer and to the seller. When working as a disclosed dual agent, a brokerage firm must have the express permission of a party prior to disclosing confidential information to the other party. Such information includes the highest price a buyer can afford to pay and the lowest price a seller will accept and the party’s motivation to buy or sell. Remember, a brokerage firm acting as a disclosed dual agent will not be able to put one party’s interests ahead of the other party and cannot advise or counsel either party on how to gain an advantage at the expense of the other party on the basis of confidential information obtained from or about the other party. If you decide to enter into an agency relationship with a firm which is to work as a disclosed dual agent, you are advised to sign a written agreement with that firm. TRANSACTION BROKER The new jersey real Estate Licensing law does not require licensees to work in the capacity of an "agent" when providing brokerage services. A transaction broker works with a buyer or a seller, or both in the sales transaction without representing anyone. A TRANSACTION BROKER DOES NOT PROMOTE THE INTERESTS OF ONE PARTY OVER THOSE OF THE OTHER PARTY TO THE TRANSACTION. Licensees with such a firm would be required to treat all parties honestly and to act in a competent manner, but they would not be required to keep confidential any information. A transaction broker can locate qualified buyers for a seller or suitable properties for a buyer. They can then work with both parties in an effort to arrive at an agreement on the sale or rental of real estate and perform tasks to facilitate the closing of a transaction. A transaction broker primarily serves as a manager of the transaction, communicating information between the parties to assist them in arriving at a mutually acceptable agreement and in closing the transaction, but cannot advise or counsel either party on how to gain an advantage at the expense of the other party. Owners considering working with a transaction broker are advised to sign a written agreement with that firm which clearly states what services that firm will perform and how it will be paid. In addition, any transaction brokerage agreement with a seller or landlord should specifically state whether a notice on the property to be rented or sold will or will not be circulated in any or all Multiple Listing System (s) of which that firm is a member. YOU MAY OBTAIN LEGAL
ADVICE ABOUT THESE THIS STATEMENT IS NOT
A CONTRACT AND IS (OPTIONAL ACKNOWLEDGEMENT
OF RECEIPT AFTER |
"By signing this Consumer Information Statement, I acknowledge that I received this Statement from (Name of Brokerage Firm) prior to discussing my motivation to sell or lease or my desired selling or leasing price with one of its representatives." FOR BUYERS AND TENANTS "By signing this Consumer Information Statement, I acknowledge that I received this Statement from (Name of Brokerage Firm) prior to discussing my motivation or financial ability to buy or lease with one of its representatives." (OPTIONAL INDICATION OF IN WHAT CAPACITY FIRM INTENDS TO WORK WITH RECIPIENT OF CONSUMER INFORMATION STATEMENT AS PERMITTED BY (g) 2 ABOVE:)
(i) In all brokerage agreements, brokerage firms must include the following:
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