NCJAR provides one of the most beneficial member services within the Realtor® organization - the NCJAR Legal Hotline. Free legal information is available to NCJAR members on legal issues relating to real estate practices. Get the most out of your membership and take advantage of this FREE member resource.
Questions received enable the association to track issues of concern, develop educational programs, services, legislative responses, and NCJAR publications to address the issues. The goal is to increase professionalism and decrease your professional liability.
NCJAR Legal Hotline is available Monday – Friday, 9:30am-4:00pm, excluding holidays and during NCJAR functions. Your question will be sent to our association counsel, and you will receive a response as soon as possible.
NCJAR Legal Hotline Ask for: Mary Cano, NCJAR CEO
LEGAL HOTLINE ARCHIVE Q&A’s
Clients are going through a divorce. They have an investment property that they want to list. Only one spouse is on the Deed. Who signs the listing agreement? Does the other spouse need to sign if they purchased the property during their marriage?
Only the record owner must sign the listing agreement. However, it is always good to get both to sign the listing agreement, but the record owner will suffice.
If a residential rental contract reaches its natural expiration date, does the Tenant have to vacate if the Landlord chooses not to renew?
A Landlord must allow the Tenant to renew the lease unless the Landlord has good cause for an eviction under the Anti-Eviction Act. (this does not apply to two or three-family owner-occupied dwellings, motels, hotels, transients or seasonal tenants). Yearly and month-to-month leases will automatically renew for another term unless a valid “notice to quit” is given by the Landlord or unless the Tenant gives notice to the Landlord that the Tenant will return possession of the premises to the Landlord. If the Tenant or Landlord does not renew the lease and the lease was for a term of more than one month and the tenant holds over (stays after the expiration of the lease), the tenancy will become a month-to-month tenancy, if the landlord continues to accept the rent and there is no other agreement between the landlord and the tenant. The tenancy is still subject to all the terms and conditions of the written lease other than its duration term. (State of NJ Dept. of Community Affairs)
Is there any problem with a Seller using an attorney out of state in a residential sale transaction?
Not if the attorney is representing the Seller. If the attorney represents the buyer, the attorney would have to use a title company for the closing itself unless the attorney was admitted to the Bar in NJ. It should be noted that local custom and practice is unique from state to state so retaining an out of state attorney could create a challenge.
It is a violation of the law (federal law) to put anything in a mailbox that is not stamped and delivered in the ordinary course. The item also should not be taped to the mailbox or lay on top of the mailbox.
An “arms-length transaction” is a typical transaction which is negotiated between he parties in good faith and guided by current market trends and forces. It often comes up in short sales where the mortgage company is accepting less then they are owed and they want the parties to sign an affidavit confirming that it was an “arms-length transaction”.
Can a Landlord request to see the full credit report of a potential Tenant and refuse to rent to the Tenant without it? The Tenant will only give the Landlord the credit score and nothing else.
It is a reasonable request of the Landlord to ask for the full report. The Landlord would not violate any law or policy if he/she refuses to rent to that potential Tenant on that basis.
If a Buyer agent is going to give up a percent of his/her commission on a sale because his/her Son is buying the property, how would that adjustment take place at closing?
The Broker would bill the Seller a reduced commission based on the percent reduction, and then the Seller would then pass that reduction over to the Buyer as a concession on the closing statement. The full sales price is recorded, not the reduced price.
Not if he/she represents the Seller. Obviously, a Seller or a Buyer Is free to choose anyone, including a lawyer for advice. But if the lawyer represents the Buyer, he/she would need to retain a title company for the closing (settlement) itself unless he/she was admitted to the Bar in NJ
If a Seller gets an offer $20,000 over asking, and does not accept the offer and instructs the listing agent to keep marketing the property at a higher price, are there ramifications to the Listing Broker or Seller?
The highest offer may not always be the best offer. There can be contingencies and other issues. In addition, if the Seller, in good faith, comes to believe that their property might be worth more than previously thought, they should discuss with their listing agent about adjusting the price.
If a rental agreement reaches its natural termination date, does the tenant have to vacate if the landlord chooses not to renew?
The tenant has the right to stay and renew (with reasonable modifications) unless the Landlord has statutory grounds, ie: non-payment of rent, breaking the terms of the lease by having more occupants then originally agreed upon. Some of these grounds require procedure forms such as “Notice to Quit” to be served on the Tenant to give them adequate notice. Landlord should consult with their personal attorney as to how to proceed.
If a buyer agent is going to reduce his/her % of commission on a sale, what is the proper procedure at closing?
Assuming the Buyer’s agent wants to benefit the Buyer and not the Seller, the Broker bills the Seller a reduced commission, and then the Seller, in turn, shifts that amount over to the Buyer as a concession on the closing statement.
A property is owned by 3 siblings and is being sold. Do all siblings need to signed the same copy of the Deed or can 3 individual copies of the same deed by signed individually by each sibling?
The best practice would be to prepare only one Deed with 3 separate signature pages and 3 separate acknowledgments (similar to a notarization). The creating of 3 separate deeds would subject the Seller to 3 separate recording fees to the County (about $100 apiece); an unnecessary expense and effort.
If 2 people sign a lease, and one of the 2 leaves is the remaining tenant responsible for the full lease amount?
Yes. The remaining tenant remains responsible to the Landlord for all promises and obligations in the lease. Of course, he/she would be entitled to sue the other tenant who vacated for his/her fair share.
Yes, typically but not always…the Seller who is staying after closing pays the Buyer an amount equal to the Buyer’s actual “carrying charges”, i.e., interest on Buyer’s new mortgage, property taxes, and Buyer’s homeowner’s insurance. Sometimes however, the agents work out other terms such as Seller agrees to a lower sales price if he/she could stay in the property for 2 months for free.
Every Seller must pay a Realty Transfer Fee on a property they own that they are selling regardless of whether they live there or not. Although it is substantial a senior citizen may get a discount if the property is his/her primary residence.
If the Owner/Seller is the one appointing the POA, there isn’t any clear and obvious conflict of interest. However, the agent should check with his/her office manager/broker first and also with his/her E & O insurance carrier to make sure there is no exception for coverage if he/she acts as a POA for a client. A buyer should not appoint the agent as the POA as the mortgage lender could object as there is a direct conflict of interest between the agent and the Buyer.
If a Seller fails the following 2 tests, there will be a 2% (of the Contract sales price) withholding from the Seller at closing. Although it is commonly referred to as an “Exit Tax” it is really not a tax but an estimated tax payment. If there is not a capital gain tax due from the Seller, it will be refunded to the Seller when they file their tax return or file another form with the State explaining whey there is no capital gains tax due and payable. If there is a tax payable this will be applied toward that tax.
The 2 tests are:
- Is the Seller leaving the State of NJ? (on the applicable form, called a GIT-REP#) there is a spot to filling the Seller’s forwarding address.
- Did the Seller live in the property for less than 2 years?
If a husband and wife are both owners on the deed, and they rent out their property to a tenant, do both husband and wife have to sign the lease agreement?
Yes..both husband and wife have to sign the lease agreement.
NCJAR Legal Hotline Disclaimer
We offer these questions and answers from our Board Attorney for general discussion purposes. Our Board Attorney does not represent the members of NCJAR individually or as a whole. Facts and circumstances can vary widely from transaction to transaction, and laws can change on a daily basis so you should consult your company attorney or personal attorney before taking any action. This service is meant to assist you in understanding the issues better so that your discussion with your company or personal attorney can be more focused and productive. Neither the Board, its Members, its Trustees, or its Counsel shall be liable to you for any damages you sustain by relying on these Questions and Answers in your transactions or practice.