NEW JERSEY REAL ESTATE

Understanding the Real Estate Consumer Protection Enhancement Act (RECPEA)

Beginning August 1, 2024, New Jersey’s Real Estate Consumer Protection Enhancement Act updates how buyers, sellers, and real estate professionals work together — with an emphasis on transparency, written agreements, and clear agency relationships.

What Is the Real Estate Consumer Protection Enhancement Act?

Signed into law in July 2024, the Real Estate Consumer Protection Enhancement Act (also referred to as RECPEA or CPEA) updates New Jersey’s real estate rules to strengthen protections for both consumers and licensees. The law focuses on:

  • Requiring more complete property information up front for buyers.
  • Ensuring written agreements spell out services, compensation, and agency relationships.
  • Clarifying how agents can represent buyers and sellers within the same brokerage.
  • Making representation at open houses more obvious to the public.
  • Changing how compensation can be displayed in the MLS.
  • Adding continuing education requirements so licensees stay current.
Big picture: the law aims to give consumers clearer information before they commit to a contract and to make agency relationships and compensation more transparent.

Key Protections for Buyers & Sellers

1. Seller’s Property Condition Disclosure Required

For residential real estate, sellers must now provide a fully completed property condition disclosure form before a buyer becomes contractually obligated. The form is meant to capture what the seller knows about the property’s condition so buyers can make better-informed decisions and reduce future disputes.

2. Written Brokerage Service Agreements

All real estate licensees are now required to use written brokerage service agreements. These agreements outline:

  • Who the brokerage represents (buyer, seller, both as dual/designated agents, or as a transaction broker).
  • Whether the relationship is exclusive or non-exclusive.
  • How compensation will be calculated and paid — including a statement that commissions are fully negotiable and not set by law.

3. Designated Agency Now Permitted

The act allows “designated agency” as a new form of representation in New Jersey. Within the same brokerage:

  • One licensee can be appointed to represent the seller as the seller’s designated agent.
  • A different licensee can be appointed to represent the buyer as the buyer’s designated agent.

The designating broker oversees the transaction and functions as a neutral dual agent, while each designated agent continues to owe full fiduciary duties to their own client. Written informed consent from both parties is required before using designated agency.

4. Clear Representation at Open Houses

Listing agents must now provide signage at open houses that clearly explains who they represent. The sign makes it clear that the open house agent represents the seller unless a written agreement creates a different relationship. It also reminds prospective buyers that they have the option to have their own buyer’s agent.

5. Compensation & MLS Display Changes

Under the new law, listing brokers may be restricted from displaying offers of cooperative compensation in the MLS if the MLS prohibits it. Instead, offers of compensation may need to be communicated through other marketing channels or directly between brokers, in line with MLS policies and national guidance.

6. Updated Continuing Education Requirements

The act adds new continuing education requirements for license renewal. Courses must focus heavily on core topics such as agency, disclosure, legal issues, ethics, fair housing, and related areas — and now include a specific course on agency to keep professionals aligned with the updated law.

What This Means for You as a Consumer

Whether you are buying or selling, RECPEA is designed to make the process more transparent and predictable:

  • More information up front: you see a completed property disclosure before you are locked into a contract.
  • Written clarity: your brokerage agreement spells out duties, services, and compensation in writing.
  • Clearer roles at open houses: you know immediately who the agent represents and what that means for you.
  • Better-educated professionals: enhanced education requirements aim to keep licensees up-to-date on agency and disclosure rules.

If you have questions about how these changes apply to your specific situation, I’m happy to walk you through the details before you sign anything.

Source: https://www.njrealtor.com/government-affairs/cpea/
Information deemed reliable but not guaranteed.

REQUEST THE FULL 2024 RECPEA PDF GUIDE

For a concise, printable overview of the 2024 Real Estate Consumer Protection Enhancement Act, you can download the PDF guide summarizing the key provisions and how they affect New Jersey buyers and sellers.

DOWNLOAD THE PDF GUIDE