S759

An Act concerning the certification of real estate property managers and supplementing chapter 2B of Title 45 of the Revised Statutes and P.L.1993, c.30 (C.45:22A-43 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. This act shall be known and may be cited as the "Real Estate Property Managers Act of 2008."

2. a. The Legislature finds and declares that it is the policy of this State, and the purpose of this act, to promote the competence and professionalism of those persons acting in the capacity of real estate property managers of rental properties or of commonly-owned property in common interest communities, and that the public interest requires that those persons serving in this capacity have demonstrated their qualifications and knowledge of the performance required of them, as well as the knowledge of the statutory obligations of those persons or entities that have contracted for their services.

b. Those property managers who have not demonstrated and maintained the qualifications as expressed in this act shall not be permitted to hold themselves out as having that special competence.

c. The Division of the New Jersey Real Estate Commission in the Department of Banking and Insurance is uniquely situated to oversee of a special body established by this act to regulate the conduct of certified real estate property managers, and to establish qualifications and continuing education requirements for certified real estate property managers.

3. As used in this act:

"Board" means the New Jersey Real Estate Property Manager Certification Board.

"Firm" means a sole proprietorship, a professional corporation, a partnership, a limited liability company, a limited liability partnership, or any other lawful form of business organization.

“Common interest community” means a residential community in which at least some of the real property is owned as tenants-in-common by the residents of the community, and includes condominiums, cooperatives, and planned real estate developments for which an association has been formed to manage the common property.

“Contract” means a contract between a homeowner’s association and a manager to perform all duties as defined in all agreements regarding a common interest community.

“Division” means the Division of the New Jersey Real Estate Commission in the Department of Banking and Insurance.

"License" means a certification issued to an individual or firm, permitting the individual or firm to hold themselves out as certified in the practice of real estate property management.

"Licensee" means the holder of a license issued pursuant to

P.L. , c. (C. ) (pending before the Legislature as this bill).

"Manager" means an individual holding a license under this act, and who performs real estate property management services.

"Nonlicensee" means a person not certified as a real estate property manager in any state or possession of the United States or the District of Columbia.

"Owner of a firm" means any person with an equity or equivalent interest in a firm, such as a shareholder with respect to a corporation or a partner with respect to a partnership, or an individual with respect to a sole proprietorship.

"Practice unit" means any office of a firm registered with the board to engage in the practice of real estate property management in the State of New Jersey.

4. a. There is created in the Division of the New Jersey Real Estate Commission in the Department of Banking and Insurance a Real Estate Property Manager Certification Board consisting of 12 members, to be appointed by the Governor as follows:

Two members who shall be managers of community associations, one of whom shall be a member of the Institute of Real Estate Managers, and one of whom shall be a member of the Community Associations Institute;

One member who shall be a manager of a multiple dwelling rental project containing more than 50 units;

One member who shall be a licensed insurance broker in the State;

One member who shall be a licensed real estate broker in the State;

One member who shall be an attorney-at-law in good standing with the bar of New Jersey with significant experience in the representation of common interest communities;

One member who shall be a certified public accountant with significant experience in financial accounting for community associations;

One member who shall be a member of an executive board of a common interest community;

Two members who shall be unit owners residing in a common interest community and who shall not be members of an executive board of any common interest community;

One member who shall represent the interests of developers of planned real estate developments; and

The Public Advocate, or his designee, as an ex officio member, to represent the interests of low and moderate income households residing in common interest communities.

Other than the State executive department member, the members of the board shall be residents of the State appointed by the Governor for terms of three years and until the appointment and qualification of their successors. Of the members initially appointed, three shall hold office for one year; three shall hold office for two years; and four shall hold office for three years. Vacancies shall be filled for the unexpired terms only. The Governor may remove any member of the board, other than the State executive department member, for cause, upon notice and opportunity to be heard.

b. The board shall organize as soon as possible after the appointment of its members and shall annually elect a chairman and a secretary from among its members. The board shall carry out the responsibilities assigned to it under P.L. , c. (C. ) (pending before the Legislature as this bill) and such other matters as the division may require. The board, through the division, shall promulgate such rules and regulations as it deems necessary to effectuate the purposes of this act. All regulations adopted, amended or repealed by the board shall be subject to the review and approval of the division.

c. A majority of the members of the board shall constitute a quorum and no action of the board shall be taken except upon the affirmative vote of a majority of the members of the entire board.

d. Members of the board shall be reimbursed for actual expenses reasonably incurred in the performance of their official duties, provided that expenditures of the board in any fiscal year shall not exceed board revenues and all expenditures shall be in accordance with the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) and the annual appropriations act.

5. The board shall keep a record of its proceedings and a register of all applications for certification required pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill), which register shall include but not be limited to:

a. The name and residence of each applicant;

b. The date of the application;

c. The applicant's place of business;

d. Whether the applicant was rejected or a certificate was granted and the date of such action.

The board shall compile annually a list of certified real estate property managers and practice units authorized to practice in this State. This list shall be maintained by the division and available to the public.

6. A person who is not certified under P.L. , c. (C. ) (pending before the Legislature as this bill) shall not hold himself out as being a certified real estate property manager, or use a title or description denoting that the person is so certified. A person violating this section shall be guilty of a disorderly persons offense, upon conviction.

7. Each person desiring to obtain a certification to practice as a real estate property manager shall make application therefore to the board, upon such form and in such manner as the board shall prescribe and shall furnish satisfactory evidence to the board that he or she:

a. Is at least 21 years of age;

b. Is of good moral character; and

c. Has successfully completed a board approved tutorial program in real estate property management, or has at least three years' experience practicing real estate property management, or has been employed by a practice unit for at least three years prior to the date of the application.

The board shall evaluate each applicant applying for a certificate to practice real estate property management and make the final determination regarding each applicant's admission to the examination and the issuance or denial of a certificate.

8. The board shall administer an examination, and shall establish an examination fee for this purpose, to applicants who comply with section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill). The examination shall be written in the English language and shall test the applicant's knowledge of real estate property management practices and law, including accounting methods customarily utilized or required by law to be utilized, preparations of budgets and maintenance of reserve accounts, conflict of interests and ethical considerations, best business practices, requests for proposals and bidding procedures, real property maintenance, property management of common interest communities, including, but not limited to, court decisions and statutory provisions regarding the rights of owners in such communities, collection of debt practices, and such other subjects as the board may require. Examinations shall be held within the State at least once a year at a time and place to be designated by the board. If an applicant fails to pass the examination, he may be reexamined at the next examination upon payment of a reexamination fee established by the board.

9. a. The board shall certify each applicant who passes the examination, in accordance with standards fixed by it, and who is not disqualified to be certified pursuant to the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. Certificates shall be valid for two years and shall be renewed biennially. A certified real estate property manager shall pay a renewal fee to the board on or before July 1 of the year in which his certificate expires. If the renewal fee is not paid by that date, the certificate shall automatically expire. A certificate which has thus expired may, within five years of its expiration, be renewed on payment to the board of all past due renewal fees and the delinquency fee. After the five year period a certificate may be renewed only by complying with the provisions of P.L. ,

c. (C. ) (pending before the Legislature as this bill) relating to the issuance of a certificate.

c. A person shall be disqualified for a certificate if the requirements of section 12 of P.L. , c. (C. ) (pending before the Legislature as this bill) are not met.

10. a. The board shall establish standards for the approval or recognition of courses of study, schools, tutorial programs, and practical experience in real estate property management, completion of which will satisfy the requirements of subsection c. of section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. The board shall approve or recognize training or practical experience acquired by an applicant prior to the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), if that training or practical experience meets the standards set by the board.

c. The board shall establish standards for the continuing education of certified real estate property managers.

d. The board shall establish standards of conduct for certified real estate property managers, which shall include, but not be limited to, requirements to report to appropriate State entities clear violations of State requirements concerning common interest communities.

11. The board may refuse to grant, or may suspend or revoke a certification of a real estate property manager upon proof to the satisfaction of the board that the holder thereof has:

a. Employed in a practice unit uncertified persons to practice real estate management; or

b. Advertised the practice of real estate property management as certified so as to disseminate false, deceptive or misleading information, whether as an individual, through a professional service corporation, or through a third party.

12. In addition to any other bonds or sureties that may be required pursuant to contract, no licensee under this act shall undertake to do any work in the State unless and until he shall have first entered into a bond in favor of the State of New Jersey in the sum of $3,000 executed by a surety company authorized to transact business in this State, approved by the Department of Banking and Insurance and to be conditioned on the faithful performance of the provisions of this act. No municipality shall require any similar bond from any real estate property manager licensed under this act. The board shall by rule and regulation provide who shall be eligible to receive the financial protection afforded by the bond required to be filed by this section. The bond shall be for the term of 12 months and shall be renewed at each expiration for a similar period.

13. The board shall submit to the Division of the New Jersey Real Estate Commission and to the Legislature annually in January of each year a report, which shall include, but not be limited to, a summary of the implementation of P.L. , c. (C. ) (pending before the Legislature as this bill); the number of certifications made in the preceding year; and a description of all complaints received and disciplinary action taken against certified real estate property managers by the board and the Division of the New Jersey Real Estate Commission in the preceding year. The report may include any legislative bills which the board may desire to recommend for adoption by the Legislature.

14. Nothing in this act shall affect the license of a person who is engaged in the business of a real estate broker, broker-salesperson, or salesperson under the provisions of chapter 15 of Title 45 of the Revised Statutes.

15. An association formed to manage a common interest community shall employ or contract for property management services only those persons or entities that have obtained certification from the New Jersey Real Estate Property Manager Certification Board pursuant to section 9 of P.L. , c. (C. )(pending before the Legislature as this bill), and shall require by contract that such entities carry adequate liability insurance and proof of bonding as required under section 12 of P.L. , c. (C. ) (pending before the Legislature as this bill).

16. This act shall take effect on the first day of the sixth month next following enactment.

STATEMENT

This bill would create a board within the Division of the New Jersey Real Estate Commission to provide a certification process of real estate property managers. These professionals are the individuals and firms performing property management of rental properties and of common interest communities, such as condominiums and planned developments. The purpose of the bill is to increase competency among these practitioners, particularly for those managing property in planned developments. These developments are the fastest growing type of real estate holdings, and owners residing in these communities often delegate much of the statutory obligations, as well as the day-to-day operations, to these managers.

Applicants wishing to apply for the certification are required to be at least 21 years of age, of good moral character, and to have successfully completed a board approved tutorial program in real estate property management, or to have at least three years' experience practicing real estate property management, or to have been employed by a practice unit for at least three years prior to the date of the application. In addition, an applicant must successfully pass an examination, which shall test the applicant's knowledge of real estate property management practices, including accounting methods customarily utilized or required by law to be utilized, conflict of interests and ethical considerations, bidding, best business practices, real property maintenance, property management of common interest communities, including, but not limited to, court decisions and statutory provisions regarding the rights of owners in such communities, collection of debt practices, and such other subjects as the board may require. Each licensee would be required to be bonded in the amount of $3,000, to be renewed annually.

A person need not hold a certification in order to work as a real estate property manager; however, a non-certified person may not represent himself as certified, or otherwise advertise that he holds certification. The Division of the New Jersey Real Estate Commission will maintain a list of those persons certified and those firms that are registered as having certified personnel.

The bill requires homeowner associations managing common interest communities to employ only property managers and firms who have obtained certification under the bill’s provisions, and who are adequately insured and bonded.