Sponsored by:
Assemblyman CRAIG J. COUGHLIN
District 19 (Middlesex)
Assemblyman ERIK PETERSON
District 23 (Hunterdon, Somerset and Warren)
SYNOPSIS
Sets time periods for conditions in certain real estate contracts to begin at completion of attorney review period; allows notification of contract disapproval during attorney review by certain methods.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning contracts of sale of residential real estate and supplementing Title 46 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Notwithstanding any other law or contract provision to the contrary, a contract of sale for residential real estate located in the State of New Jersey that is required to contain the attorney review provision set forth at N.J.A.C.11:5-6.2, and that is entered into on or after the effective date of this act, shall also provide as part of the contract that any time period provided for in the contract for any party to complete any condition or contingency or to take any action with respect to the mortgage commitment, home inspection, flood hazard certification, or lead based paint inspection clauses in the contract, shall begin to run from the date of the completion of the attorney review period or from the date on which the parties subsequently agree to the terms of the contract after disapproval by an attorney pursuant to the attorney review provision, whichever is later.
b. Any provision in a real estate contract of sale that is subject to subsection a. of this section, that attempts to begin the time periods referred to in that subsection in a manner other than as described in that subsection, or that is otherwise not in compliance with that subsection, shall be null and void and unenforceable as a matter of law.
2. An attorney for the buyer or the seller that disapproves a contract that is subject to subsection a. of section 1 of this act, pursuant to the attorney review provision of the contract, may use facsimile, email, certified mail, telegram, or personal delivery, as a method to notify the real estate broker and other party named in the contract of the disapproval.
3. This act shall take effect on the 90th day next following enactment.
STATEMENT
This bill requires the use of certain provisions in residential real estate contracts of sale that are prepared by real estate licensees and that are therefore subject to the attorney review provision required to be in these contracts pursuant to N.J.A.C.11:5-6.2. The bill mandates the use of certain contract provisions relating to how time periods begin for completion of certain conditions and contingencies.
This bill provides that, notwithstanding any other law or contract provision to the contrary, a contract of sale for residential real estate located in the State of New Jersey that is required to contain the attorney review provision set forth at N.J.A.C.11:5-6.2, and that is entered into on or after the effective date of the bill, shall also provide as part of the contract that any time period provided for in the contract for any party to complete any condition or contingency or to take any action with respect to the mortgage commitment, home inspection, flood hazard certification, or lead based paint inspection clauses in the contract, shall begin to run from the date of the completion of the attorney review period or from the date on which the parties subsequently agree to the terms of the contract after disapproval by an attorney pursuant to the attorney review provision, whichever is later.
The bill further provides that any provision in a real estate contract of sale that is subject to the requirements of this bill, that attempts to begin the time periods referred to in the bill in a manner other than as described in the bill, or that is otherwise not in compliance with the bill, shall be null and void and unenforceable as a matter of law.
The bill also clarifies that an attorney for the buyer or the seller that disapproves a contract that is subject to the requirements of this bill, pursuant to the attorney review provision of the contract, may use facsimile, email, certified mail, telegram, or personal delivery, as a method to notify the real estate broker and other party named in the contract of the disapproval. Currently, N.J.AC.11:5-6.2 allows disapproval of a contract during attorney review by certified mail, telegram, or personal delivery. To reflect the common use of email as a means of notification to various parties in real estate contract negotiations, the bill adds email and facsimile as acceptable methods to disapprove a contract during the attorney review period.