Real Estate Commission Adopts New Licensing Fees

On June 23, 2009, the New Jersey Real Estate Commission (REC) readopted its rules concerning the licensing and conduct of real estate licensees in New Jersey. Among the changes approved by the REC include the use of a state-contracted vendor to conduct criminal history and fingerprint checks, as well as changes to the licensing fees. The fees for broker of record, sole proprietor broker and broker-salesperson decreased from $285 to $270, and the fee for a salesperson’s license decreased from $175 to $160. The fee to obtain a temporary broker’s license increased from $250 to $300, and the multiple broker’s license category has been eliminated. Stay tuned to the Week in Review to obtain an updated copy of the readopted regulations once they are published by the REC in the New Jersey Register.

Fannie Mae Confirms Short Sales Commissions Policy

In discussions between NAR and Fannie Mae, Fannie Mae has reconfirmed its short sale commission policy and established a process for REALTORS^® to follow if issues arise. On February 24, 2009, Fannie Mae sent Announcement 09-03 to its servicers instructing them not to negotiate commissions on short sales below the amount negotiated by the listing agent, unless the commission exceeds 6 percent. The Announcement reminded servicers that third party approvals (i.e., private mortgage insurers) may be required and can affect commissions. In response to concerns raised by NAR that some servicers of Fannie Mae loans are unaware of this policy or believe it is not binding, Fannie Mae has established a process for NAR members when short sale commission issues arise.

Visit www.REALTOR.org to review the steps to the new process.

NATIONAL ASSOCIATION OF REALTORS^® Offers Resources on Flood Insurance

Floods are the most common natural disaster in the U.S. and most homeowners insurance does not cover damage it causes. As a REALTOR^®, potential home buyers rely on you to help them understand the oftentimes confusing home buying process and the role homeowner's insurance plays in the process. Flood risk and flood insurance are important topics that home buyers should be aware of.

View the NAR flyer, "What to Know and Say About Flood Risk and Flood Insurance." Designed for REALTORS^®, this flyer clarifies what you should know about flood risk and flood insurance, and how you can talk about it with your customers.

REC Now Offering Online License Renewal for Brokers

The New Jersey Real Estate Commission (REC) now requires that brokers renew their licenses online, as there will be no paper renewals for the 2009-2011 licensing period. Brokers renewing their licenses must visit the Department of Banking and Insurance (DOBI) website. For additional information on the new license renewal procedures for brokers only, visit the REC’s website or the REC online licensing brochure.

HUD Delays "Required Use" RESPA Rule

The U.S. Department of Housing and Urban Development (HUD) announced in early March that it will delay the planned implementation of the Real Estate Settlement Procedures Act (RESPA) "required use" regulation for 90 days, until July 16, 2009. HUD is inviting public comments on whether it should withdraw the definition in the final RESPA rule that was published on November 17, 2008 and prohibits home builders from giving customers incentives in exchange for using the home builder's affiliated mortgage lender or other company. The delay in the effective date is in response to a lawsuit filed by the National Association of Home Builders in December 2008 seeking to enjoin the "required use" rule. All other effective dates for HUD's RESPA regulation remain unchanged. Read HUD's press release.

Public Advocate Addresses Residential Rental Unit Foreclosures

On March 12, 2009, NJAR^® learned that New Jersey Public Advocate Ronald Chen sent letters to the executive officers and managers of certain real estate companies informing them of the rights of residential tenants in buildings that have been foreclosed upon. According to the 1994 Supreme Court ruling in Chase Manhattan Bank v. Josephson, the Anti-Eviction Act protects tenants living in rental units from eviction even if the property where they live has been foreclosed upon.

On December 23, 2008, New Jersey Public Advocate Ronald K. Chen held a press conference to discuss his office's efforts to address the rights of tenants in buildings that have been foreclosed. According to the 1994 New Jersey Supreme Court decision Chase Manhattan Bank v. Josephson, the Anti-Eviction Act protects tenants living in rental units from eviction even if the building they live in has been foreclosed. Obtain information from the Public Advocate and from the New Jersey Real Estate Commission on the rights of tenants in the foreclosure process. In addition, read NJAR^®'s webpage and response to the Public Advocate's press conference.

Risk Management

A big part of running a successful real estate business is avoiding the risks that can lead to costly litigation. Challenges may occur that deal with issues such as agency, antitrust, disclosure, ethics and fair housing. Armed with the resources below, members can be ready to proactively deal with the challenges that may come their way.

As the licensing authority in the state, the New Jersey Real Estate Commission (REC) maintains regulations for practitioners to uphold for licensure. Practitioners who are members of the NATIONAL ASSOCIATION OF REALTORS^® pledge to uphold the Code of Ethics as an added professional standard in their practice.

Members can check out the following resources on licensing requirements and other issues that impact the real estate business.