Commission Rules & Regulations

🔒 Escrow money

• Others' money goes into the trust account within: 5 business days
• The trust account must be at: an authorized financial institution in NJ
• Broker's own commission goes into the business account within: 5 business days
• Advance fee over $25 → itemized accounting within 90 days
• Trust records reconciled at least: quarterly
• Credit-card deposits allowed only for rentals of: 125 days or less

🗄️ Records

• Escrow and transaction records kept: 6 years
• Unaccepted offers & expired listings that never led to a deal: 6 months
• Proof behind payment figures in an ad: 12 months after the ad last ran
• Broker–salesperson agreement & pay accountings: 6 years

🏢 Offices & pay

• Main-office supervisor on site at least: 5 days a week
• Broker personally at an office at least: 1 day a week
• Branch office supervisor must be a: broker-salesperson
• Salesperson's share paid within: 10 business days of the broker's receipt
• Written accounting to a departing salesperson within: 30 days

📄 Listings, offers, contracts, ads

• Report a new listing to the MLS within: 48 hours
• Written offers to the seller within: 24 hours
• Phone acceptance put in writing within: 24 hours
• Attorney review lasts: 3 business days
• Licensee may prepare sales contracts for homes of: 1 to 4 units (and vacant one-family lots)
• Promotion worth more than $1,000 → written disclosure

⚖️ Discipline

• Fine, first violation: up to $5,000 · each later one: up to $10,000
• Written notice before a suspension/revocation hearing: at least 10 days
• Temporary suspension: notice at least 24 hours before · full hearing within 30 days
• Violation number that can make someone a "repeat offender": 3rd
• Report a conviction or indictment to the Commission within: 30 days

📅 Newer rules (2026)

• Change of branch-office supervisor reported within: 48 hours
• Instead of a paper pocket card, a licensee may carry: a digital copy of the license on a phone or tablet

From the Commission's rule update effective Jan. 20, 2026 (R.2026 d.020). Probably not in the book.

🪧 The sign outside every office

Firm name + the words "Licensed Real Estate Broker". A corporation or LLC also shows its broker of record's name. A sole-proprietor broker shows their own name.

👀 How much must the broker be around?

• The broker must personally oversee the business and be physically at the main or a branch office at least 1 day a week.
• Running things only by phone or mail for a long time can be treated as "lending" the license, which is prohibited.
• Every transaction is under the broker's ultimate supervision, and no escrow money moves without the broker's express authorization.
• A broker-salesperson who supervises an office still isn't the one ultimately responsible. The broker is.

🚧 Commingling = mixing

The rules count all three of these as commingling:

1. Mixing principals' money with the licensee's own
2. Not depositing others' money promptly (5 business days) into a separate trust account
3. Not promptly segregating money held for others

Not commingling: a clearly nominal amount of the broker's money kept in the trust account to keep it open or cover bank fees.

Conversion is different: actually using clients' money for yourself. The Guaranty Fund (Unit 1) exists for victims of conversion and embezzlement.

🗂️ Escrow fine print

• Name it: the account is titled "trust account" or "escrow account," and those words appear on its checks and deposit slips.
• Interest: the broker may not keep or use interest earned on others' money. (A separate interest-bearing account for one specific deal is allowed.)
• Salesperson's job: accept only cash or a check payable to the broker, and hand it to the broker immediately.
• Signers: the broker of record (or sole-proprietor broker) must be a signer. Extra signers can only be actively licensed broker-salespersons or salespersons.
• Credit cards: only for short-term rentals (≤ 125 days), into a separate special account. Not for sales deposits.
• Bills paid from escrow need written authorization.
• Shaky seller? If there's reason to doubt the seller can perform or return a deposit, safeguard it (e.g., an escrow with a lawyer or bank) or get the buyer's separate signed acknowledgment of the risk.
• Advance fees over $25 (e.g., for advertising): give the client an itemized accounting within 90 days.
• Records: keep 6 years, at the main NJ office (or the branch that has the account). Paper or electronic. The Commission may inspect and copy them.
• Files stay put: a salesperson who leaves can't take any transaction files.

• 1Can't say "sold" until closing. Before that: "under contract."
• 2Payment figures need "approximate/estimated" and "to a qualified buyer." No town given, either: the ad must name the municipality.
• 3Free offers are OK, but never through a lottery, contest, game or drawing.
• 4An agent's personal phone needs the broker's office phone too.
• 5Salespeople can't advertise a "home office." Only licensed main/branch offices.
• 6The broker's name must be more prominent than the agent's.

👥 Teams

A "team" is a group of agents inside a brokerage. It is not its own brokerage. DOBI Bulletin 22-07 (2022) reminds teams:

• The broker supervises every team member, not the team leader.
• Members are paid by the broker, never by the team leader.
• No team "satellite office" unless it's a licensed, supervised office.
• Team ads and websites follow every ad rule: broker's name more prominent, and the office phone or a link to the broker.

📞 Calls & email (federal rules)

Study decks for this unit also cover these. They're federal (FTC) rules, and the national part of the exam lists Do-Not-Call too.

• Do-Not-Call: check lists against the National Registry every 31 days. No sales calls before 8 a.m. or after 9 p.m. Past customers may be called for 18 months after a transaction; people who inquired, for 3 months. Never call again anyone who asked not to be called.
• CAN-SPAM (marketing email): no misleading headers or subject lines, identify it as an ad, include a physical postal address and an easy opt-out, and honor opt-outs within 10 business days.

📝 The broker–salesperson agreement

Signed by both before the salesperson does any brokerage work. Employee or independent contractor is fine. It must state:

• The commission rate or split
• Pay within 10 business days of the broker's receipt (or once the funds clear, or on a schedule the agreement spells out)
• What's paid on deals that close after she leaves
• Changes count only if in writing, signed by both

Late pay → the broker owes a written explanation. She leaves → a written accounting within 30 days. The broker keeps all of it 6 years.

🏷️ Paid through her own LLC

• A salesperson or broker-salesperson may form an LLC (or other entity) to receive commissions, and the broker may pay that entity.
• The entity must be registered with the Commission first ($50). She must own it. One entity per licensee, and it can't be shared with a team.
• It doesn't change who supervises her. She's still licensed under, and paid by, her broker.

Newer than (or brand-new to) the book: the LLC option comes from a 2021 law, but its registration rule only took effect in Aug. 2024, and P.L.2025, c.271 (Jan. 2026) clarified it. Older material may say a salesperson can be paid only by her broker, period. That's still the core rule. The LLC is just where the broker sends her pay.

🗓️ From listing to closing

⚖️ Attorney review: 3 business days

A licensee may prepare the sales contract for a 1–4 family home or a vacant one-family lot. It must carry the attorney review clause, starting with a large-print heading at the top of page 1. So must a licensee-prepared residential lease of 1 year or more.

• Count from delivery of the signed contract to buyer and seller. Skip Saturdays, Sundays and legal holidays.
• Either side's attorney may disapprove, by notice to the broker(s) and the other party within the 3 days. Otherwise the contract binds as written.
• Buyer and seller may agree in writing to extend the period.
• Leaving the clause out = unauthorized practice of law.

How the notice is sent: the rule's clause still says certified mail, telegram or personal delivery. Since Conley v. Guerrero (NJ Supreme Court, 2017), fax, email, personal delivery, or overnight mail with proof of delivery also work. The Commission's 2026 rule update didn't change the clause.

🪜 The sanctions

🚨 Emergency tools: when money is missing

If there's prima facie (on-its-face) evidence that a licensee failed to account for others' money or commingled:

• Temporary suspension before a full hearing, with at least 24 hours' notice (phone or writing) and a chance to be heard
• Full evidentiary hearing within 30 days
• For a broker: the Commission may freeze some or all of the broker's bank accounts, serving the banks within 10 days
• Suspension continues past 30 days, or the license is revoked → within 10 days the Commission asks Superior Court to take the frozen funds, released only by court order