In early July, 2024 Gov. Murphy signed Bill S3192/A4454, also known as the Real Estate Consumer Protection Enhancement Act, into law. The law, went into effect Aug. 1, 2024, strengthens both consumer and real estate licensee protections.

Brokerage Services Agreements Required

All real estate licensees will be required to use brokerage agreements, which outline services they will provide to all clients over the course of a respective transaction.

Brokerage services agreement means a written agreement between a brokerage firm and principal (i.e. the seller or buyer) that appoints a brokerage firm to represent the principal as an agent (i.e. seller’s agent, buyer’s agent, disclosed dual agent or designated agent) or work with a buyer or seller as a transaction broker. Broker services agreements include, but are not limited to, sale and rental listing agreements; buyer/lessee representation agreements; and transaction broker, dual agency and designated agency agreements.

At a minimum, a brokerage services agreement must include: (a) the term of the agreement, (b) the name of the brokerage firm, (c) whether the agency relationship is exclusive or non-exclusive, (d) whether the principal consents to dual agency or designated agency, if the opportunity arises, (e) whether the principal consents to the broker acting as a disclosed dual agent, if necessary, (f) the brokerage’s compensation and how it’s calculated, and (g) a statement that broker compensation is fully negotiable and not set by law.