Senator   PATRICK J. DIEGNAN, JR.
District 18 (Middlesex)
Allows formation of limited liability companies by real estate salespersons and broker-salespersons to receive commission income and requires certain disclosures on promotions.
CURRENT VERSION OF TEXT
An Act concerning real estate brokers, broker-salespersons and salespersons, and amending R.S.45:15-16 and R.S.45:15-17.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1.       R.S.45:15-16 is amended to read as follows:
45:15-16.       a.   No real estate salesperson or broker-salesperson shall accept a commission or valuable consideration for the performance of any of the acts herein specified, from any person except his employer or contracting broker, who must be a licensed real estate broker.
b.       A real estate salesperson or broker-salesperson may form a limited liability company pursuant to the "Revised Uniform Limited Liability Company Act," P.L.2012, c.50 (C.42:2C-1 et seq.), or any other entity permitted by law, in order to receive a commission or other valuable consideration pursuant to subsection a. of this section, and the real estate salesperson or broker-salesperson may accept payment of the commission or other valuable consideration or any part thereof from the limited liability corporation or other entity. Notwithstanding the formation of such an entity, a salesperson or broker-salesperson who satisfies the requirements of subparagraph (K) of paragraph (7) of subsection (i) of R.S.43:21-19 shall not be considered an employee pursuant to that law.
c.         The New Jersey Real Estate Commission shall create a registration process for a limited liability company and other entity to receive a commission or other valuable consideration pursuant to subsection a. of this section.
(cf: P.L.2018, c.71, s.12)
2.       R.S.45:15-17 is amended to read as follows:
45:15-17.       The commission may, upon its own motion, and shall, upon the verified complaint in writing of any person, investigate the actions of any real estate broker, broker-salesperson, or salesperson, or any person who assumes, advertises or represents himself as being authorized to act as a real estate broker, broker-salesperson, or salesperson or engages in any of the activities described in R.S.45:15-3 without being licensed so to do.   The lapse or suspension of a license by operation of law or the voluntary surrender of a license by a licensee shall not deprive the commission of jurisdiction to proceed with any investigation as herein provided or prevent the commission from taking any regulatory action against such licensee, provided, however, that the alleged charges arose while said licensee was duly licensed.   Each transaction shall be construed as a separate offense.
In conducting investigations, the commission may take testimony by deposition as provided in R.S.45:15-18, require or permit any person to file a statement in writing, under oath or otherwise as the commission determines, as to all the facts and circumstances concerning the matter under investigation, and, upon its own motion or upon the request of any party, subpoena witnesses, compel their attendance, take evidence, and require the production of any material which is relevant to the investigation, including any and all records of a licensee pertaining to his activities as a real estate broker, broker-salesperson, or salesperson.   The commission may also require the provision of any information concerning the existence, description, nature, custody, condition and location of any books, documents, or other tangible material and the identity and location of persons having knowledge of relevant facts of any other matter reasonably calculated to lead to the discovery of material evidence.   Upon failure to obey a subpoena or to answer questions posed by an investigator or legal representative of the commission and upon reasonable notice to all affected persons, the commission may commence an administrative action as provided below or apply to the Superior Court for an order compelling compliance.
The commission may place on probation, suspend for a period less than the unexpired portion of the license period, or may revoke any license issued under the provisions of R.S.45:15-1 et seq., or the right of licensure when such person is no longer the holder of a license at the time of hearing, or may impose, in addition or as an alternative to such probation, revocation or suspension, a penalty of not more than $5,000 for the first violation, and a penalty of not more than $10,000 for any subsequent violation, which penalty shall be sued for and recovered by and in the name of the commission and shall be collected and enforced by summary proceedings pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.), where the licensee or any person, in performing or attempting to perform any of the acts mentioned herein, is deemed to be guilty of:
a.         Making any false promises or any substantial misrepresentation; or
b.       Acting for more than one party in a transaction without the knowledge of all parties thereto; or
c.         Pursuing a flagrant and continued course of misrepresentation or making of false promises through agents, broker-salespersons, or salespersons, advertisements or otherwise; or
d.       Failure to account for or to pay over any moneys belonging to others, coming into the possession of the licensee; or
e.         Any conduct which demonstrates unworthiness, incompetency, bad faith or dishonesty.   The failure of any person to cooperate with the commission in the performance of its duties or to comply with a subpoena issued by the commission compelling the production of materials in the course of an investigation, or the failure to give a verbal or written statement concerning a matter under investigation may be construed as conduct demonstrating unworthiness; or
f.         Failure to provide his client with a fully executed copy of any sale or exclusive sales or rental listing contract at the time of execution thereof, or failure to specify therein a definite terminal date which terminal date shall not be subject to any qualifying terms or conditions; or
g.       Using any plan, scheme or method for the sale or promotion of the sale of real estate which involves a lottery, a contest, a game, a prize, a drawing, or the offering of a lot or parcel or lots or parcels for advertising purposes[, provided, however, that a promotion or offer of free, discounted or other services or products which does not require that the recipient of any free, discounted or other services or products enter into a sale, listing or other real estate contract as a condition of the promotion or offer shall not constitute a violation of this subsection if that promotion or offering does not involve a lottery, a contest, a game, a drawing or the offering of a lot or parcel or lots or parcels for advertising purposes].   If a broker participates in a promotion or offering of free, discounted, or other services or products which confers upon the recipient a monetary benefit of greater than $1,000, the broker shall provide written disclosure of the benefit to the recipient and any information concerning the promotion or benefit as may be required by the commission.  A broker shall disclose in writing any compensation received for such promotion or offer in the form and substance as required by the federal "Real Estate Settlement Procedures Act of 1974," 12 U.S.C. ss.2601 et seq., except that, notwithstanding the provisions of t