N.J.A.C. 11:5-2.1 — Educational requirements

(a) Salesperson and broker candidates shall provide proof that they have completed a course of education in real estate subjects taught in accordance with N.J.S.A. 45:15-10.1 as follows: 1. This education requirement shall apply to disabled veteran candidates pursuant to N.J.S.A. 45:15-11. Candidates may satisfy the requirement by completing a program of study in real estate offered by an accredited college or university as follows: i. Candidates seeking a salesperson license must complete a program consisting of at least 75 hours of instruction; and ii. Candidates seeking a broker license must complete a program consisting of at least 225 hours of instruction. 2. A salesperson shall not receive credit toward the fulfillment of the education requirement for attendance at a broker prelicensure course and a broker candidate shall not receive credit toward the fulfillment of the education requirement for attendance at a salesperson prelicensure course. (b) To qualify for the State salesperson licensing examination, a candidate must successfully complete a course of study in real estate, consisting of a minimum of 75 hours of instruction, at a school licensed by the Commission pursuant to N.J.S.A. 45:15-10.4. To qualify for the State broker licensing examination, a candidate must successfully complete courses of study in real estate, consisting of a minimum of 150 hours of instruction, at a licensed school or other authorized provider. (c) A candidate for a broker license seeking credit for satisfactory completion of the satisfactory completion of the education requirement must be licensed as a salesperson at the time of enrollment. This provision does not apply to disabled veteran candidates. (d) The time allotted by a school for a final examination shall be applicable toward the total hours of instruction. No more than five minutes of each hour may be utilized for breaks. Instructors must provide information on the State license examination and the Commission's license issuance procedures and perform administrative functions, such as taking attendance and making announcements of general interest. (e) The requirement that a broker license candidate complete a 90-hour general course and that a salesperson candidate complete a 75-hour course shall not apply to: 1. A candidate who held a broker license issued by another state and was actively engaged in the real estate brokerage business for the three years immediately preceding the date of application; 2. Applicants for licensure as a broker who are attorneys admitted to the practice in New Jersey and applicants for licensure as a salesperson who are attorneys admitted to practice in New Jersey or in any other state at the time of making application. A broker candidate who is an attorney admitted to the practice in New Jersey and a salesperson candidate who is an attorney admitted to practice in New Jersey or in any other state at the time of making application; 3. A salesperson candidate who has earned a college degree from an accredited college or university; provided that: i. The total hours devoted to real estate and related subjects was at least 75 hours, completed within three years of making their application; ii. The candidate earned a bachelor or associate degree in real estate, regardless of how long prior to their application for a waiver they received that degree; or iii. The candidate satisfactorily completed at least 75 hours of instruction in real estate or related subjects, of which, at least 45 hours dedicated to real estate in a post-graduate program, completed within three years of submitting their application; 4. A salesperson candidate who holds or has held a real estate license issued by another state; provided that: i. The candidate satisfactorily completed a prelicensure course at a licensed school, college, or university in that state; ii. The prelicensure course was approved by that state's licensing authority; iii. The prelicensure course totaled at least 75 hours of instruction; iv. The candidate qualified for licensure by state examination; and v. The candidate was actively licensed in that state within three years of their application. 5. A salesperson candidate who previously held a broker license in New Jersey that expired more than two but less than five years prior to making application. (f) To satisfy the education requirement, a salesperson candidate shall complete the 75-hour course, consisting of substantive instruction on the following subjects for the number of hours indicated: 1. Property rights (9 hours); 2. Contracts and other property instruments (12 hours); 3. Leases and landlord-tenant relations (6 hours); 4. Mortgages and other liens (12 hours); 5. Business opportunity sales (2 hours); 6. The laws of agency (12 hours); 7. Appraising (2 hours); 8. License Act and regulations (9 hours); 9. Other state, Federal, and municipal laws, rules, and regulations, including N.J.S.A. 17:16C-1 et seq., 39:1-1 et seq., 46:8-43 et seq., and 46:8C-1 et seq., as they pertain to the resale of mobile and manufactured housing units which bear or are required to bear motor vehicle titles (four hours); 10. Salesperson duties and pitfalls in the real estate business (3 hours); 11. Fair housing and housing discrimination, including Federal Fair Housing and New Jersey laws related to housing and housing discrimination (one hour); and 12. Quizzes and final examination (three hours). (g) To satisfy the education requirement, a broker candidate shall complete 150 hours of total instruction comprised of a 90-hour general course and two 30-hour courses concentrating on ethics/agency and office management. All courses must be successfully completed within two years. Where the courses are not so completed, a candidate must again successfully complete any previously taken course and any courses not previously taken within a two-year time frame, and again fulfill the experience requirement established at N.J.S.A. 45:15-9 and N.J.A.C. 11:5-3.8, to be eligible for the broker license examination. 1. The 90-hour general course may be divided into a maximum of 24 modules of material, with the content corresponding to the subjects identified below. Courses offered in modules may cover more than one subject per module. A candidate must start a course on the starting date of the module. A candidate shall be given credit for the successful completion of the 90-hour general course when they have received instruction in all of the subjects identified below for the number of hours indicated and passed a comprehensive final examination. Instruction shall be provided on the following topics for the number of hours indicated: i. Licensing laws and regulations, including the Real Estate Sales Full Disclosure Act and N.J.A.C. 11:5-9 (six hours); ii. Listing contracts--sales and rentals (three hours); iii. Sale contracts (three hours); iv. Deeds and real property rights and interests including nature of ownership, legal description, chain of title, restrictions, consideration, various types, acknowledgments and recording, land and land elements, water rights (including riparian rights), state claims regarding tidelands estates and other interests, methods of ownership, dower and curtesy, wills and descent, adverse possession and fixtures (three hours); v. Advanced financing techniques including qualification formulae, various types, typical prerequisites (insurance, flood insurance, if applicable, certificate of occupancy, etc.) and income tax ramifications (six hours); vi. Liens, foreclosures and redemptions (one hour); vii. Easements, restrictions, etc. (one hour); viii. Condemnation (one hour); ix. Zoning, including non-conforming uses, variances, subdivisions, planning, zoning issues raised by condominium construction or conversion and other types of real estate development (five hours); x. Surveys (non-government type) and legal descriptions (one hour); xi. Property taxes, assessment, re-valuations, assessment appeals and special appeals (three hours); xii. Real estate valuation including techniques and distinctions between comparative market analyses and formal appraisals (three hours); xiii. Settlement/closing procedures, RESPA forms (six hours); xiv. Mathematics relative to real estate (six hours); xv. Laws: RESPA, Truth in Lending, rent control, New Jersey Land Use Law, New Jersey's Truth in Renting Law, and the provisions in that law, at N.J.S.A. 17:16C-1 et seq., 39:1-1 et seq., and 46:8C-1 et seq., which pertain to the resale of mobile and manufactured housing units that bear, or are required to bear, motor vehicle titles (two hours); xvi. Business and management practices (total of six hours), including: (1) Company structure including single ownership, partnership, corporate, requirements to establish, employees vs. independent contractors; (2) Office management including bookkeeping and accounting relative to real estate, escrow responsibilities, company dollars, ledgers, records and computers; (3) Personnel management including recruiting, hiring, training, supervising, compensation and termination; (4) Advertising and promotions; (5) Community involvement by the company, broker, salespersons and referral agents; and (6) Insurance including errors and omissions, etc. xvii. Principles of agency including ethics and legal liability, disclosure requirements and case studies (six hours); xviii. Commercial and industrial real estate including small scale, large scale, leasing, financing, site analysis, advertising, remuneration, bulk sales, U.C.C., considerations in franchise transactions, E.C.R.A., BOCA Code, construction financing and other commercial construction concerns (three hours); xix. Property management, including repairs and maintenance, public relations, collection of rents, government regulations, business trends, personnel, recordkeeping, advertising, etc. (three hours); xx. Residential real estate development including requirements of New Jersey's Planned Real Estate Development Act including time-sharing, the Home Owner's Warranty program and other concerns regarding single-family and condo/co-op development, conversion, marketing and financing (two hours); xxi. Leases and landlord/tenant laws including Truth in Renting Law (four hours); xxii. Real estate investments, syndications, REIT's, limited partnerships, and S.E.C. licensing requirements (two hours); xxiii. Income tax considerations and ramifications of various real estate transactions (three hours); and xxiv. Fair housing and housing discrimination, including Federal Fair Housing and New Jersey laws related to housing and housing discrimination (one hour). 2. Within the 90-hour general course, instruction shall be provided on the following additional topics for the number of hours indicated. These topics shall be taught to provide students with a basic understanding of the subject and of their scope and effect. Instruction should include the resources where students may obtain additional information and/or specific data concerning the topics' applicability to or impact upon particular locations, and educate students on their obligations to ascertain and disclose such information. Topics include: i. Radon contamination, including testing and remediation techniques and the New Jersey DEP confidentiality statute (one hour); ii. Ground water contamination, including testing and remediation techniques (one hour); iii. Problems posed by proximity to solid waste disposal and/or toxic waste sites (one hour); iv. Ground water percolation and private sewage disposal systems, including testing methods (one hour); v. Problems posed by lands officially designed as Wetlands, Pinelands, or special classifications (one hour); and vi. New Jersey's Coastal Areas Facilities Review Act (one hour). 3. Instructors shall provide information to students concerning the procedures to sit for the State licensing examination and how licenses are issued by the Commission, and shall give at least two spot quizzes and a comprehensive final exam on the material covered in the course (four hours). 4. Students shall be assigned reading outside of the primary textbook on topics, including, but not be limited to, informational publications of the New Jersey Department of Environmental Protection on the various environmental topics covered, sections of the New Jersey Law Against Discrimination that directly relate to the activities of real estate professionals, and other topics as directed by the Commission. 5. All candidates for licensure as a broker or broker-salesperson must successfully complete two 30-hour courses, one on ethics/agency law and relationships, and another on office management and related topics. i. Courses shall be taught by licensed instructors at licensed schools. ii. The agency/ethics course shall be taught using case studies of recent Commission decisions in disciplinary actions, demonstration models, and other non-lecture techniques. iii. A final examination of not less than one hour shall be administered in all such courses on which students must receive a passing grade in order to be deemed to have successfully completed such courses. iv. No school shall allow students to commence either the agency/ethics or office management course at a time other than the starting date. 6. The course on ethics/agency shall include: i. The fiduciary duties owed by agents to their principals; ii. Disclosed and undisclosed dual agency; iii. Conflicts of interest and self-dealing; iv. The risks and benefits of sub-agency to the principal and the agent; v. Restrictions on and disclosure requirements regarding acting for more than one party to a transaction, including those pertaining to licensees providing mortgage services; vi. Disclosure requirements to non-principals; vii. Issues raised by licensees involved in transactions as non-agents; and viii. The obligations to properly qualify or pre-qualify prospective purchasers and related issues. 7. The course on office management shall include: i. Office management requirements imposed upon supervising brokers of main and branch offices; ii. Recordkeeping requirements, with an emphasis on escrow account records; iii. The importance of adequate supervision and training of other licensees to assure their compliance with the license law and the rules of the Commission; iv. Proper qualification and pre-qualification techniques, including student demonstrations on the significance of training and oversight of other licensees; v. Statutory and rule requirements pertaining to contracts, leases, and listing agreements and broker advertising; vi. Closings; vii. Environmental concerns; and viii. Licensure requirements and procedures applicable to license applications, transfers, changes of broker address, branch offices, etc., and office closing requirements. (h) A complete syllabus for all prelicensure education courses shall be maintained at the offices of the Commission and be open to the public for inspection. (i) Course hours may be modified at the discretion of the director of the approved school, subject to written notice, and written approval by, the Commission. (j) Courses delivered online in an on-demand format, in addition to meeting the requirements at (f) and (g) above, must be approved by ARELLO.