13.1 NJ Consumer Information Statement (CIS): Mandatory Timing & Disclosures

Statutory Foundation and Purpose of the CIS

In New Jersey, real estate agency disclosure is governed by administrative regulation N.J.A.C. 11:5-6.9, promulgated by the New Jersey Real Estate Commission (NJREC) under the statutory authority of Title 45, Chapter 15 of the New Jersey Revised Statutes (N.J.S.A. 45:15-1 et seq.). The Consumer Information Statement on New Jersey Real Estate Relationships (commonly known as the CIS) is a mandatory disclosure form designed to eliminate consumer confusion regarding representation, fiduciary obligations, and professional allegiances in real property transactions.

Prior to the adoption of N.J.A.C. 11:5-6.9, buyers frequently presumed that real estate licensees showing them properties acted in their best interests, when in legal reality, licensees operated as subagents of the seller under common law principles. The CIS establishes transparency by compelling licensees to disclose explicitly whom they represent and what duties they owe before any substantive business is conducted.

Core Tenets of N.J.A.C. 11:5-6.9

1. Mandatory Educational Disclosure: The CIS does not constitute an employment contract, brokerage agreement, or agency agreement. It is an informational consumer protection disclosure that explains the four permitted business relationships in New Jersey real estate brokerage.
2. Standardized Verbatim Language: The New Jersey Real Estate Commission prescribes the exact wording of the CIS. While licensees may use a condensed summary version for initial short-form or electronic communications, the full statutory text must be provided prior to entering into contracts or substantive agency agreements.
3. Scope of Mandatory Application: Mandatory delivery applies strictly to transactions involving one- to four-family residential properties, individual residential condominium and cooperative units, and vacant land intended for residential construction. Commercial transactions, industrial leases, and multi-family properties consisting of five or more dwelling units are exempt from mandatory CIS delivery, although common law agency disclosure principles remain applicable.

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Mandatory Timing and Delivery Triggers

The statutory timing of the CIS presentation is one of the most heavily tested areas on the New Jersey Real Estate Broker Examination. Under N.J.A.C. 11:5-6.9, a licensee must provide the CIS:

Statutory Delivery Rule: Licensees must present the Consumer Information Statement to a buyer, seller, tenant, or landlord at the first substantive discussion or business communication concerning a specific real property, and in all instances prior to eliciting or receiving confidential information regarding the consumer's financial qualifications, motivations to buy or sell, or desired price and terms.

Defining the "Substantive Discussion"

A substantive discussion occurs whenever a conversation moves beyond generic informational inquiries (such as asking for the list price, property square footage, architectural style, or directional location) and begins to involve:

• The consumer's personal financial position (e.g., pre-approval limits, down payment reserves, debt obligations, or credit scores);
• The consumer's specific timeline, moving urgency, or underlying motivation (e.g., job relocation, divorce, pending foreclosure, or estate settlement);
• The consumer's willingness to accept or offer terms different from the public listing terms;
• An in-person or private scheduled tour of a specific property conducted by the licensee.

Open House Interactions

At a public open house, a licensee is not required to present the CIS to every member of the general public who walks across the threshold, provided the conversation remains casual and focused on general architectural and physical features. However, two strict statutory conditions apply:

1. Signage Display: The listing broker or agent must prominently display the full-sized CIS poster or have printed copies visibly available at the sign-in station.
2. Individual Substantive Trigger: The moment an open house visitor begins to discuss their private budget, personal qualifications, or specific interest in negotiating an offer on the home, the licensee must halt the substantive conversation and formally provide the CIS.

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Permitted Methods of Delivery & Acknowledgment Protocols

N.J.A.C. 11:5-6.9 authorizes several methods of delivering the CIS, reflecting both traditional and contemporary practice standards:

• In-Person Physical Delivery: Handing the printed statutory CIS document to the consumer.
• Electronic Mail and Digital Signatures: Transmitting the CIS via email, secure client portals, or compliant electronic signature platforms (e.g., DocuSign, Dotloop) as an unalterable PDF attachment or integrated disclosure.
• Facsimile Transmission: Direct fax transmission with confirmed transmission logs.

+-----------------------------------------------------------------------------------------+
|                        CIS MANDATORY COMPLIANCE DECISION TREE                           |
+-----------------------------------------------------------------------------------------+
|                                                                                         |
|               Does the transaction involve 1-4 residential units,                       |
|               condos, co-ops, or vacant residential land?                               |
|                                    |                                                    |
|                  +-----------------+-----------------+                                  |
|                  | YES                               | NO                               |
|                  v                                   v                                  |
|   Mandatory Delivery under N.J.A.C.       Statutory CIS Exempt;                         |
|   11:5-6.9 triggered at first             Standard common law agency                    |
|   substantive discussion.                 disclosure rules apply.                       |
|                  |                                                                      |
|                  v                                                                      |
|   Does consumer sign the CIS                                                            |
|   acknowledgment receipt?                                                               |
|                  |                                                                      |
|         +--------+--------+                                                             |
|         | YES             | NO                                                          |
|         v                 v                                                             |
|   Place signed CIS    Licensee MUST immediately execute a contemporaneous               |
|   in broker file.     written notation: Date, Time, Specific Property,                  |
|   Retain 6 years.     and Context of Refusal. Retain in file for 6 years.               |
|                                                                                         |
+-----------------------------------------------------------------------------------------+

Handling Consumer Refusal to Sign

The CIS contains a standardized consumer acknowledgment section stating that the consumer has received the document and understands the brokerage relationships described. While consumers are strongly encouraged to sign, they are not legally obligated to sign the acknowledgment.

If a buyer, seller, landlord, or tenant refuses to execute the acknowledgment receipt, the licensee must not terminate the discussion solely due to the refusal, provided the consumer understands the relationship. Instead, N.J.A.C. 11:5-6.9 establishes a mandatory compliance protocol:

1. Contemporaneous Written Notation: The licensee must make an immediate, contemporaneous written entry on a copy of the CIS or in the electronic transaction management file.
2. Required Notation Elements:
   • Exact date and time of the presentation;
   • Specific property address discussed or shown;
   • Full legal name of the consumer;
   • The precise reason or verbal context given for refusing to sign (e.g., "Consumer stated they do not sign any documents prior to consulting their real estate attorney");
   • The signature and license reference of the licensee recording the notation.
3. Six-Year Record Retention: Pursuant to N.J.A.C. 11:5-5.4, this annotated CIS document must be preserved in the employing broker's permanent transaction records for a minimum of six (6) years from the date of the interaction or transaction closing.

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Mandatory Inclusion in Listing and Representation Agreements

Beyond the initial standalone delivery of the CIS, New Jersey law requires strict reinforcement of agency relationships within brokerage contracts. Under N.J.A.C. 11:5-6.9(i):

• Exclusive Listing Agreements: Every exclusive right to sell, exclusive agency, or open listing agreement must contain a prominent, verbatim disclosure acknowledging that the seller received the CIS prior to signing the contract and specifying the exact agency capacity in which the broker will act (e.g., Seller's Agent or Transaction Broker).
• Buyer Representation Agreements: Every exclusive buyer brokerage agreement must explicitly declare that the buyer received the CIS and clarify whether the broker operates as an exclusive Buyer's Agent or a Transaction Broker.
• Font Size and Formatting Requirements: The mandatory CIS confirmation language inside listing agreements and buyer agency contracts must be set in at least 10-point boldface type or larger, ensuring it is visually distinct and impossible for a consumer to overlook.

Commercial Real Estate vs. Residential Mandates

Brokers must clearly distinguish the jurisdictional boundary between residential and commercial transactions: