Current through Register Vol. 54, No. 7, April 4, 2022
(a) Every resident
real estate broker shall establish and maintain, in an authorized financial
institution in New Jersey, and every reciprocally licensed Real Estate broker
shall establish and maintain in an authorized financial institution in New
Jersey or the State wherein he has a resident real estate broker's license, a
special account or special accounts, separate and apart from other business or
personal accounts, for the deposit of all moneys or others received by the
broker acting in said capacity, or as escrow agent, or as temporary custodian,
in a real estate transaction.
Every real estate broker shall file with the broker's application for licensure
or license renewal an affidavit or certificate setting forth the name or names
of the financial institution or institutions where said special account or
accounts have been established and shall identify any and all account numbers.
Any change in an existing account or the establishment of any new account shall
be immediately reported to the Real Estate Commission in the form of an
affidavit or certification.
following shall be considered to constitute commingling by a licensee:
1. Mingling the money of his principals with
2. Failure to maintain and
deposit promptly in a special account in an authorized financial institution,
separate and apart from personal or other business accounts, all moneys
received by a real estate broker acting in said capacity, or as escrow agent,
or as the temporary custodian of the funds of others in a real estate
3. Failure to
promptly segregate any moneys received which are to be held for the benefit of
(d) Where the
nature of a given real estate transaction is such that the commissions earned
by a broker in connection with services rendered in said transaction are
included among the funds deposited to the broker's trust account, the portion
of such funds deposited to the broker's trust account which constitute the
broker's commission shall be promptly paid from the trust account, with
appropriate annotations to the broker's business records to indicate the amount
and source of such commissions; provided, however, that such broker shall have
been previously authorized to make such disbursement.
(e) Within the meaning of this section, the
word "promptly" means not more than five business days next following the
receipt of the money or property of another. However, where monies are received
by a licensee as provided in (c)2 above as a good faith or earnest money
deposit accompanying an offer to buy or lease property, if during the five
business day period next following the date of the licensee's receipt of those
funds the offer is withdrawn prior to acceptance by the offeree or is rejected
with no counteroffer made by the offeree, the licensee need not deposit those
funds into an escrow or trust account but may, upon the request of the offerer,
return them in the same form in which they were received to the offerer. In all
other cases, the licensee must deposit such monies within five business days of
receipt. Examples of such cases include transactions where negotiations are
ongoing, or if a contract or lease is being reviewed by an attorney, or if
subsequently to the rejection of an offer the offerer has requested the
licensee to retain the monies in the event that the offerer determines to
submit another offer on the same or a different property.
(f) The maintenance of clearly nominal
amounts of the licensee's funds in trust accounts solely to provide continuity
in such account or to meet bank service charges shall not be construed to be
(g) Where any law or
governmental regulation compels maintenance of a fixed amount of the funds of a
licensee is a trust account for the purpose of providing a safety factor, the
maintenance of such fixed amount shall not be construed to be
(h) Every person
licensed as a broker of record or as a sole proprietor broker shall be a
signatory on the escrow or trust account(s) of their brokerage firm. Only
individuals who are actively licensed by the Commission as a real estate
broker-salesperson or salesperson may be additional signatories on escrow or
accept payments to be held in trust or in escrow, or as the temporary custodian
of the funds of others in any real estate transaction, in the following forms:
cash; a negotiable instrument payable to the broker's firm; a charge against a
check debit card resulting in a credit to the broker's trust or escrow account;
or a wire transfer of funds directly from an account of the payor to the trust
or escrow account of the broker. As provided in this subsection, brokers may
also accept deposit and rent payments to be held by them in trust or in escrow
or as a temporary custodian in the form of charges made upon the credit cards
of tenants in short term rental transactions.
All payments to be held by a broker in
trust or in escrow, or as the temporary custodian of monies in a real estate
transaction, made in the form of cash, negotiable instruments, wire transfers
or by charges made upon credit cards or check debit cards shall be recorded in
the broker's trust or escrow account ledger and as otherwise required by
2. Brokers shall not accept payments made
through credit card charges in any real estate transaction other than a short
term rental. For the purposes of this subsection, a "short term rental" is a
rental of a residential property for not more than 125 consecutive days with a
specific termination date.
Brokers who accept payments in the form of credit card charges in short term
rentals shall cause those payments to be credited to a special trust or escrow
account, distinct from the escrow or trust account(s) maintained by the broker
for other purposes. Brokers who accept such payments shall also maintain a
business account, separate and apart from all trust or escrow accounts
including the account to which the credit card charges shall be credited. The
said business account may be the same business account maintained by the broker
for general purposes.
accepting any payment in the form of a credit card charge on a short term
rental, a broker shall inform the owner in writing of the potential for such
payments to be "charged-back" by the tenant and obtain written authorization
signed by the owner for the broker to accept such payments.
i. For the purposes of this subsection,
"charged-back" means the recrediting of a previously charged payment to the
account of a cardholder through the electronic debiting of an account of the
ii. Where an owner's
written authorization is secured by the listing broker, it shall be made a part
of or an addendum to a listing agreement.
iii. In all cases, the owner's written
authorization shall be retained by the broker to whom it was given as a
business record in accordance with N.J.A.C. 11:5-5.4.
5. In the event that a dispute concerning a
charged-back payment arises between a broker and a consumer, under no
circumstances may the broker apply or set-off against the disputed amount any
monies paid to the broker on another transaction in which the same consumer is
Brokers who accept
credit card charges in payment of deposits or rent on short term rentals shall
formulate a written statement of their policy on credit card payment
cancellations. All such cancellation policies shall include:
i. An indication of the time period during
which the cardholder may cancel the charged payment made to the broker;
ii. A statement that, in the
event a cancellation request is not received by the broker within the specified
cancellation time period, the request will not be honored and the disposition
of the monies credited to the broker will be governed by the terms of the lease
or rental agreement between the landlord and the cardholder.
7. In no event shall the
cancellation period terminate prior to the delivery to the cardholder of a
fully executed written lease containing the final terms of the rental
agreement, or the full acceptance by the parties of the final terms of a verbal
provide copies of the written cancellation policy in the following manner:
i. To property owners upon the earlier of the
broker obtaining a listing on the rental property or presenting an offer to
rent the property; and
prospective tenants at the time of first accepting a payment in the form of a
credit card charge. In the event that the same tenant makes subsequent payments
on the same rental transaction through charges against a credit card, the
broker accepting such payments shall not be required to provide additional
copies of the written cancellation policy.
9. Except as otherwise provided in (j) below,
brokers who accept payments in the form of credit card charges shall comply
with all restrictions and requirements imposed by
this section with regard to the deposit and maintenance of such
In all cases,
the amount credited to a broker's special escrow or trust account as a result
of a charged payment on a short term rental transaction shall be the full
amount of the payment made by the tenant to the broker. All transaction fees
payable by the broker to the company which issued the credit card shall not be
paid before the full amount of the charged payment is credited to the broker's
special escrow or trust account. Brokers who accept payments through charges on
credit cards shall also comply with one of the procedures specified in (j)1 and
1. A business account of the broker
shall be designated in the contract between the broker and any company whose
credit card charges the broker shall accept as the sole source of funds for the
payment by the broker of all credit card transaction fees due to the company,
and the sole source of funds for all charge-backs which may be assessed against
the broker by the company; or
The broker shall maintain a reserve amount of the broker's funds in the special
escrow or trust account to which charged payments will be credited. The said
reserve shall be sufficient to cover all transaction fees incurred by the
broker on charged transactions and all estimated charge-backs of payments by
cardholders. The maintenance of such reserve funds in the said special escrow
or trust account shall not be construed as commingling. In all cases where
brokers utilize this procedure:
fees debited from the said reserve amount shall be replenished by the broker on
at least a monthly basis;
the event that a broker is notified that a charge-back has occurred after some
or all of the funds received through the charged-back payment have been
disbursed, the broker shall, within one business day of receipt of such notice,
replenish the reserve funds in the special escrow or trust account in an amount
equal to the amount debited from the reserve through the charge-back;
Brokers may replenish or
increase the said reserve amount as often as necessary. Brokers may only reduce
the said reserve amount on an annual basis. All credits to and debits from the
special escrow or trust account made by the broker to replenish, increase or
decrease the reserve amount shall be duly noted in the business records of the
broker and maintained as such as required by
N.J. Admin. Code §
As amended, R.1982
d.101, effective 4/5/1982.
See: 13 New Jersey Register 302(b), 14 New Jersey Register 345(b).
New (a) and (b) added, (c) marked "Reserved"; old (a)-(e) numbered
As amended, R.1983 d.471, effective
New Jersey Register 1343(a), 15 New Jersey Register 1865(c).
Subsections (d) through (h) recodified as (c) through (g).
by R.1993 d.8, effective 1/4/1993.
See: 24 New Jersey
Register 3483(a), 25 New Jersey Register 118(a).
to deposit of funds entrusted to real estate broker as escrow agent.
Amended by R.1998 d.497, effective 10/5/1998.
See: 30 New Jersey
Register 2333(a), 30 New Jersey Register 3646(a).
In (c), deleted
"or other property" following "money" in 1, and substituted "moneys" for
"properties" in 3; in (d), deleted ", the portion of such funds" preceding
"which constitute" and substituted "indicate" for "define" following "records
to"; and added (h).
Amended by R.1999 d.444, effective
31 New Jersey Register 2675(a), 31 New Jersey Register 4282(a).
Added (i) and (j).