Agency Relationships, Brokerage Disclosure and Consumer Information Requirements
Agency Relationships
The recognized relationships
New Jersey licensees work as a seller's agent (or landlord's agent), a buyer's agent (or tenant's agent), a dual agent only with the informed written consent of all parties, or in a non-agency facilitative capacity where the licensee assists the transaction without representing either side. Subagency is largely a historical concept; do not assume a cooperating broker represents the seller.
Fiduciary duties
Care, obedience to lawful instructions, loyalty, disclosure of material facts, confidentiality, and accounting. Confidentiality survives the transaction - a buyer's motivation or a seller's bottom line does not become public when the deal closes.
How agency is created
By written agreement (listing or buyer agency contract), by the conduct of the parties, or by the disclosures given at first substantive contact. A licensee who begins advising a buyer about negotiation has likely created a buyer-agency relationship even without a signed agreement.
Traps
- Assuming the listing broker's firm represents a buyer who calls on the sign.
- Declaring dual agency without written consent from both sides.
- Sharing one client's confidential information with the other side during dual agency.
- Forgetting that a cooperating broker's commission, even if paid by the seller, does not make that broker the seller's agent.
Worked example
The listing brokerage also produces the buyer. That is dual agency. Both the seller and the buyer must give written informed consent; the firm must remain neutral in advice and may not use one party's confidences against the other. If either party refuses, the firm must designate representation to one side or refer the other party out.
Brokerage Disclosure and Consumer Information Requirements
First substantive contact
The New Jersey Consumer Information Statement (CIS) explains the types of brokerage relationships available and must be delivered at the first substantive contact with a consumer - before confidential financial information is exchanged or advice is given. It is an educational disclosure, not a contract, and it does not itself create an agency relationship. Document delivery and obtain the acknowledgment the form provides for; the record matters if a dispute arises.
Other required disclosures
- Agency disclosure at contract: the relationship must be confirmed in writing in the listing or buyer agency agreement.
- Seller's Property Condition Disclosure: residential sellers must deliver the statutory disclosure form; a buyer's remedies are tied to its accuracy.
- Lead-based paint: for housing built before 1978, the federal disclosure, pamphlet, and a 10-day opportunity to test (or a written waiver).
- Megan's Law notice: residential buyers and tenants must be told that sex-offender registry information is available from the State, not from the licensee.
- Flood and environmental notices: where mandated by current statute or local ordinance.
Traps
- "The CIS is signed, so we represent both parties" - false; the CIS creates nothing.
- Delivering the CIS at the signing table instead of first substantive contact.
- Promising a buyer that a seller's disclosure is "guaranteed accurate."
- Skipping the lead paint disclosure on a 1970 house because the buyer "doesn't care."
Worked example
A buyer emails asking whether she can afford a $600,000 home on her salary. That request for financial advice is substantive contact; the agent should deliver and review the CIS before analyzing the buyer's finances, then document the delivery in the file.