Key Takeaways
- New Jersey requires written disclosure of agency relationships at the first substantive contact
- The Consumer Information Statement (CIS) must be provided to all buyers and sellers before substantive discussions
- New Jersey recognizes seller agency, buyer agency, disclosed dual agency, and transaction brokerage
- Written brokerage agreements are required to establish client relationships in New Jersey
- Licensees owe fiduciary duties to clients and limited duties of honesty to customers
New Jersey Agency Relationships
Important: This content covers New Jersey-specific agency law. You should complete the National Real Estate Exam Prep first, as agency concepts are also tested on the national portion.
New Jersey has specific requirements for agency disclosure and relationship types that are frequently tested on the state exam.
Consumer Information Statement (CIS)
The Consumer Information Statement is a critical New Jersey requirement:
| Requirement | Detail |
|---|---|
| When provided | At first substantive contact |
| Who receives it | All buyers and sellers |
| Purpose | Explain agency relationships |
| Signature | Consumer must sign acknowledging receipt |
CIS Contents
The Consumer Information Statement explains:
- Types of agency relationships available
- Duties owed in each relationship type
- How agents are compensated
- Consumer's rights and responsibilities
First Substantive Contact
Provide the CIS BEFORE discussing:
- Specific property needs or preferences
- Financial qualifications
- Motivation to buy or sell
- Specific property features
- Price negotiations
Types of Agency Relationships
New Jersey recognizes these brokerage relationships:
| Relationship | Description |
|---|---|
| Seller's Agent | Represents seller exclusively |
| Buyer's Agent | Represents buyer exclusively |
| Disclosed Dual Agent | Represents both with consent |
| Transaction Broker | Facilitates without representing either |
Creating Agency Relationships
| Relationship Type | Requirements |
|---|---|
| Client Relationship | Written agreement required |
| Customer Status | CIS disclosure only |
| Dual Agency | Written consent from both parties |
Client vs. Customer
Client Relationship
A client relationship exists when:
- Written brokerage agreement is signed
- Fiduciary duties are owed
- Agent represents client's interests
- Confidentiality is maintained
Customer Status
A customer is someone who:
- Has not entered into a written agreement
- Receives honest and fair treatment
- Is not owed fiduciary duties
- May receive ministerial services only
Fiduciary Duties to Clients
New Jersey agents owe clients these duties:
| Duty | Description |
|---|---|
| Loyalty | Put client's interests first |
| Obedience | Follow lawful instructions |
| Disclosure | Reveal all material facts |
| Confidentiality | Protect private information |
| Accounting | Handle funds properly |
| Reasonable Care | Act competently |
Memory Aid: LODCAR - Loyalty, Obedience, Disclosure, Confidentiality, Accounting, Reasonable Care
Duties to Customers
Even when someone is a customer (not a client), agents must:
- Treat them honestly and fairly
- Disclose material facts about property condition
- Not make misrepresentations
- Perform ministerial acts as agreed
- Present all offers (when representing seller)
Disclosure of Material Facts
All licensees must disclose material facts regardless of agency status:
What Must Be Disclosed
| Must Disclose | Need Not Disclose |
|---|---|
| Known structural defects | Prior deaths (suicide, homicide) |
| Environmental hazards | HIV/AIDS status of occupants |
| Material latent defects | Certain stigmatizing conditions |
| Unpermitted improvements | |
| Known insurance claims |
When must a New Jersey licensee provide the Consumer Information Statement (CIS)?
What is required to establish a client relationship in New Jersey?