New Jersey’s new law permitting rebates in residential real estate transactions is already drawing consumer questions.
On January 19, 2010, former Governor Jon Corzine signed A-373 into law, permitting rebates to consumers in real estate transactions. The bill’s intention is outlined in it’s explanatory statement:
“This bill amends R.S.45:15-17 to permit a real estate broker, broker-salesperson or salesperson to give a client a rebate from the commission that the real estate broker, broker-salesperson or sales person receives in a transaction.”
While the New Jersey Association of REALTORS®(NJAR) originally opposed this measure when it was first introduced, but as the bill moved forward NJAR® negotiated several amendments with the sponsors that increase consumer protection.
The NJAR®-secured amendments included in the final version of A-373:
State that only brokers can offer rebates to those buying property, rather than allowing all real estate licensees to offer rebates to buyers and sellers.
Mandate that rebates only be in the form of a credit or check.
Require that rebates be documented in a contract at the beginning of a brokerage relationship in a written or electronic form or in a buyer agency agreement.
Ensure that rebates can only be provided in connection with purchases of residential property.
Although this new law took effect immediately after being signed, the New Jersey Real Estate Commission (REC) must adopt new regulations necessary to implement the law.
Under current REC regulations offering rebates is prohibited. NJAR® expects the REC to send out an advisory in February clarifying the law.