The New Jersey Real Estate Commission (REC) has released its promised memorandum regarding implementation of the new law, enacted by former Governor Corzine, allowing buyers brokers to offer a rebate to buyers.
The REC has not promulgated the rules to implement the law yet, but since it took effect immediately upon signing buyers rebates are legal in New Jersey. Up until January 5, 2010 the Commission prohibited rebates to buyers.
Until the rules are adopted, the REC is urging compliance with the language of the law 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.
Those provisions are summarized below.
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.
Here is a full copy of the memorandum by the New Jersey Real Estate Commission on the Rebate of Real Estate Commissions.