8B — March 25 - April 14, 2016 — Owners, Developers & Managers — Multifamily | Walter R. Cohn, Esq. EXPO 2016 — M id A tlantic
Real Estate Journal www.marejournal.com
M ultifamily | W alter R. C ohn , E sq . EXPO 2016 By Mahlon Fast, J.S.C., Ret., Ehrlich, Petriello, Gudin & Plaza, P.C Obligations of property managers in NJ: Are You Violating the Law?
A
salesperson” or “referral agent” is spelled out in the legisla- tion. That is to say, a broker is essentially self-employed, whereas the other categorized persons are employed by and operate under the supervision of a licensed real estate broker. (N.J.S.A. 45:15-3) A real estate broker , for the pur- poses of R.S.45:15-1 et seq., is defined to be a person, firm or corporation who, for a fee, commission or other valuable consideration, or by reason of a promise or reasonable expectation thereof, lists for sale, sells, exchanges, buys or rents, or offers or attempts to negotiate a sale, exchange, purchase or rental of real estate or an interest therein, or collects or offers or at- tempts to collect rent for the use of real estate or solicits for prospective purchasers or assists or directs in the procuring of prospects or the negotiation or closing of any transaction which does or is contemplated to result in the sale, exchange, leasing, renting or auctioning of any real estate or negotiates, or offers or attempts or agrees to negotiate a loan secured or to be secured by mortgage or other encumbrance upon or transfer of any real estate for others … A real estate salesperson , for the purposes of R.S.45:15- 1 et seq., is defined to be any natural person who, for compensation, valuable con- sideration or commission, or other thing of value, or by reason of a promise or rea- sonable expectation thereof, is employed by and operates under the supervision of a licensed real estate broker to sell or offer to sell, buy or offer to buy or negotiate the purchase, sale or exchange of real estate, or offers or attempts to negotiate a loan secured or to be secured by a mortgage or other encum- brance upon or transfer of real estate, or to lease or rent, or offer to lease or rent any real estate for others, or to collect rents for the use of real estate , or to solicit for prospective purchasers or lessees of real estate, or who is employed by a licensed real estate broker to sell or offer to sell lots or other parcels of real estate, at a stated sal- ary, or upon a commission, or upon a salary and commis- sion, or otherwise to sell real estate, or any parts thereof,
in lots or other parcels. [Ital- ics added, to emphasize the activities commonly included in the services of a “property manager.”] A real estate broker-sales- person, for the purposes of R.S.45:15-1 et seq., is defined to be any natural person who is qualified to be licensed as a real estate broker but who, for compensation, valuable consideration or commission, or other thing of value, or by reason of a promise or rea- sonable expectation thereof, is employed by and operates under the supervision of a licensed real estate broker to perform the functions of a real estate salesperson as defined herein. A real estate referral agent , for the purposes of R.S.45:15-1 et seq., is defined to be any natural person employed by and operating under the supervision of a licensed real estate broker whose real estate brokerage- related activities are limited to referring prospects for the sale, purchase, exchange, leasing or rental of real estate or an interest therein . Refer- ral agent licensees shall only refer such prospects to the real estate broker through whom they are licensed as a referral agent and shall only accept compensation for their activity as a referral agent from that broker. A referral agent shall not be employed by or licensed withmore than one real estate broker at any given time. No person may simultaneously be licensed as a referral agent and a real estate broker, broker- salesperson or salesperson and no person licensed as a referral agent may engage in the business of a real estate broker, broker-salesperson or salesperson to an extent beyond that authorized by their status as a licensed real estate agent. No person, firm, partner- ship, association or corpora- tion shall bring or maintain any action in the courts of this State for the collection of compensation for the per- formance of any of the acts mentioned in R.S.45:15-1 et seq. without alleging and proving that he was a duly licensed real estate broker at the time the alleged cause of action arose. No person claiming to be entitled to compensation as a referral agent, salesperson
n employee must be licensed if they list a unit for sale or lease
or broker-salesperson for the performance of any of the acts mentioned in R.S.45:15- 1 et seq. shall bring or main- tain any action in the courts of this State for the collection of compensation against any person, firm, partnership or corporation other than the licensed broker with whom the referral agent, salesper- son or broker-salesperson was employed at the time the alleged cause of action arose and no action shall be brought or maintained with- out the claimant alleging and proving that he was a duly licensed real estate referral agent, salesperson or broker- salesperson at the time the alleged cause of action arose. It is irrelevantwho (wheth- er an owner or a tenant) provides the compensation to a person performing any of the services listed above: Per (N.J.S.A. 45:15-17) m. Accepting a commission or valuable consideration as a real estate broker-salesper- son, salesperson or referral agent for the performance of any of the acts specified
in this act, from any person, except his employing broker, who must be a licensed bro- ker; or r. Charging or accept- ing any fee , commission or compensation in exchange for providing information on purportedly available rental housing , including lists of such units supplied verbally or in written form, before a lease has been executed or, where no lease is drawn, before the tenant has taken possession of the premises without complying with all applicable rules promul- gated by the commission regulating these practices. This article was prepared by Mahlon Fast, J.S.C. Ret. currently counsel with Ehrlich, Petriello, Gudin&Plaza, P.C. head- quartered inNewark, NJ . It is not, nor is it intended to be, legal advice. You should consult an attorney or other qualified professional to dis- cuss your particular matter. Judge Fast can be reached at (973) 854-6713 or by e- mail at Mfast@epgp-law. com n permit rates up, Millennial and Baby Boomer renter numbers are up, and unem- ployment is down, there is a good basis for optimism. Meeting the continued de- mand for multifamily hous- ing is a major challenge and calls for more cooperation and more strategic think- ing for those involved in the various processes of develop- ing this market sector. The NHMC has called upon the federal government to make it easier for developers to in- crease the housing supply by reducing red tape, and “ad- dressing housing and tax re- form in a way that recognizes the unique characteristics of the apartment industry….” The NHMC estimates that developers must build at least 300,000 new multifam- ily units each year to simply keep pace with demand. The fact is that local, state and federal governments need to remove existing barriers to development and redevelop- ment so the continued de- mand for multifamily hous- ing can be met. Glenn Ebersole is the strategic VP of business development/marketing at Hollenbach Construc- tion, Inc. n
(this would include pre- p a r i n g o r placing ad- vertisements – offering or attempting to offer real e s t a t e o r an interest
Mahlon Fast
therein or soliciting/assisting or directing in the procuring of prospects) negotiating or signing a lease, collecting or attempting to collect rent, and negotiating a loan se- cured or to be secured by mortgage or other encum- brance upon or transfer of any real estate for others … Some employees need not be licensed, including sec- retaries, bookkeepers, con- struction or maintenance personnel, or independent contractors who service the utilities, but do not have contact with tenants or pro- spective tenants. Titles are sometimes mis- leading and cannot be relied upon; it is the actual function that makes the difference. For example, a “superinten- dent” who makes repairs and manages utilities would not be considered involved in a real estate transaction, but if that “superintendent” negotiated leases or collects rent, then that person would be considered as engaging in a real estate transaction, and would have to be licensed by the appropriate State Agency. According to New Jersey statute (N.J.S.A. 45:15-1) no person shall engage either directly or indirectly in the business of a real estate broker, broker-salesperson, salesperson or referral agent, temporarily or otherwise, and no person shall adver- tise or represent himself as being authorized to act as a real estate broker, broker- salesperson, salesperson or referral agent, or to engage in any of the activities described in R.S.45:15-3, without being licensed so to do as hereinaf- ter provided. As defined by N.J.S.A. 45:15-2 "Engaging in busi- ness" is any single act, trans- action or sale shall constitute engaging in business within the meaning of this article. The difference between a “broker” “salesperson” “broker-
2016 – A great year for multifamily . . . continued from page 2B are very pro-rent.”
The full-year numbers re- leased at the NMHC annual
conference i n d i c a t e d that multi- family sales we r e a t a record high in 2014, up o v e r 3 2 % By 2014 the market had
Glenn Ebersole
recovered from the 2007 Great Recession and panel- ists at the conference gener- ally agreed that this growth would continue into 2016 and beyond. Their optimism was also supported by the following: • Vacancies are very low throughout the nation with demand driven by strong job growth. • The renter pool is ever growing: Millennials, as well as older individuals, are seek- ing rental housing across all metropolitan markets. • Capital is readily available for development. Chances of a repeat of the 2007 Great Recession seem slight. Residential invest- ments and housing starts are seen as a strong predic- tor of economic success. With
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