Governor Signs Hillsborough Legislator's Bill to Safeguard New Jersey Real Estate Buyers and Sellers

TRENTON, NJ- – Governor Phil Murphy has signed Bill S3192/A4454, sponsored by Assemblyman Roy Freiman and Assemblywoman Eliana Pintor Marin, which is known as the "Real Estate Consumer Protection Enhancement Act," incorporating certain protections for consumers engaging in residential real estate transactions and certain aspects of commercial real estate transactions.

The measure wiil expand current law for those who assist consumers in buying or selling a property, such as a brokerage firm, buyer’s agent, seller’s agent, dual agent, designated agent, and transaction brokers. The legislation also clarifies who is considered a buyer’s agent versus a seller’s agent and what the agreement between these two groups includes.

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“A4454 ensures New Jersey residents have access to stronger consumer protections in both residential and commercial real estate transactions,” said Assemblyman Freiman (D-Hunterdon, Mercer, Middlesex, Somerset). “By standardizing broker agreements and promoting continued education for licensees, we cultivate trust and integrity in the real estate market, supporting residents throughout the process, and assisting them in achieving their homeownership goals.”

This bill is in response to a Missouri federal jury’s decision in October 2023, which found that the National Association of Realtors® (NAR) and other companies broke the law by making home sellers pay the commission for both their own real estate agent and the buyer's agent. This practice made buying a home more expensive. Though the NAR initially tried to appeal, the association decided to enter into a settlement. As part of this settlement, all realtors will be required to use buyer agency agreement forms, including 58,000 New Jersey licensees.

Recognizing that not all licensees are realtors and aiming to guarantee that all buyers receive the same transparency during their transaction regardless of whether they work with a realtor or not, this bill lays out ways to ensure that all real estate transactions comply with the principles of the NAR settlement agreement. Examples of this include requiring signs at open houses clearly indicating that the agent on premises represents the seller, not the buyer, and requiring that if a buyer chooses to be represented by the same real estate agency as the seller, different agents would represent the buyer and the seller, each with fiduciary duties to their respective clients. The bill also mandates that the seller provide a property disclosure form.

“Real estate is one of the most significant purchases for both homeowners and businesses looking to establish roots in a community,” said Assemblywoman Pintor Marin (D-Essex). “By creating a standard, we are protecting New Jerseyans, ensuring they have clear representation and a strong understanding of the process.”

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The law will take effect August 1, 2024.

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