New Jersey Real Estate Brokerage Law

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Barry S. Goodman

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For attorneys who defend or file lawsuits against real estate licensees:

  • All substantive laws governing the rights and obligations of real estate licensees
  • Procedures and ethics provisions in Real Estate Commission proceedings
  • Licensing regulations, including setting up offices and branches

For attorneys who handle real estate transactions:

  • What real estate licensees should and should not do
  • What to do with commission disputes during a transaction

New Jersey Real Estate Brokerage Law covers all of the essential areas that attorneys and real estate licensees must understand in order to navigate the explosive minefield of real estate brokerage law. The book covers everything they need to know concerning procedural issues, such as licensing and education requirements, regulations for maintaining offices, and the relationship between brokers and salespersons. It also lays out in a comprehensive fashion all of the disclosures that real estate licensees are required to make, the requirements of the Real Estate Commission concerning contracts of sale and leases that real estate licensees prepare, and the advertising rules that govern real estate licensees.

Two separate chapters deal with the activities a real estate licensee is prohibited from engaging in, and the discipline that can face a real estate licensee for violating the Real Estate License Act or any of the Real Estate Commission's regulations that implement the Act. The book also covers the limitations on a real estate licensee's activities so that they will not constitute the unauthorized practice of law, including the attorney-review clause. Other topics covered include trade associations, multiple listing services, arbitration and the Code of Ethics governing NJAR® members. Although this book primarily focuses on New Jersey law, there are several Federal laws that real estate licensees must follow. Therefore, separate chapters deal with the Real Estate Settlement Procedures Act, the Fair Housing Act and lead-based paint disclosure requirements.

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  • Availability: Available
  • Brand: New Jersey Law Journal
  • Product Type: Books
  • Edition: 2019
  • Page Count: 762
  • ISBN: 978-1-62881-545-0
  • Pub#/SKU#: JREAL19
  • Pub Date: 11/28/2018
  • Frequency: Annually

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  • Barry S. Goodman
Barry S. Goodman is a partner in the litigation department and chair of the Real Estate Brokerage Practice Group at Greenbaum, Rowe, Smith & Davis LLP in Woodbridge. Mr. Goodman concentrates his practice in real estate and real estate brokerage issues, as well as antitrust suits, corporate shareholders' and partnership disputes, and municipal law. He is also a member of the Community Association and Construction Law Practice Groups at the firm, and serves as General Counsel to the New Jersey Association of REALTORS®. He is a frequent lecturer and author on real estate brokerage issues. He received his B.A. cum laude from Rutgers College and his Juris Doctor from Rutgers University School of Law in Newark.

Chapter 1: License Required to Provide Real Estate Brokerage Services
1-1 General
1-2 Real Estate Brokers
1-3 Real Estate Salespersons
1-4 Real Estate Broker-Salespersons
1-5 Real Estate Salespersons Licensed With a Real Estate Referral Company
1-5:1 General
1-5:2 Lawsuits
1-5:3 General Restrictions
1-5:4 Real Estate Referral Companies
1-5:5 Residential Rental Referral Agencies
1-6 Non-Resident Licensees
1-6:1 Licensure in New Jersey
1-6:2 Payment of Referral Fees to Out-of-State Brokers
1-7 Exceptions to License Requirement
1-7:1 General
1-7:2 Property Owners and their Employees
1-7:3 Attorneys
1-7:4 Comprehensive Employment and Training Act
1-7:5 Equitable Exception
1-8 Locating Rental Housing
1-9 Mobile and Manufactured Homes

Chapter 2: The Relationship Between Brokers and Salespersons
2-1 Broker Supervision and Oversight of Individual Licensees
2-2 The Broker-Salesperson Agreement
2-3 Salespersons as Independent Contractors Versus Employees
2-3:1 The Applicable Tests
2-3:2 Workers’ Compensation
2-3:3 Law Against Discrimination
2-3:4 Wrongful Termination
2-3:5 Unemployment Compensation Law
2-3:6 Internal Revenue Service
2-3:7 Conscientious Employee Protection Act
2-4 Deposit and Payment of Commissions by Brokers
2-4:1 Deposit of Commissions Received by Brokers
2-4:2 Payment of Commissions by Brokers to Salespersons
2-5 Lawsuits for Commissions
2-6 Use of a License for the Benefit of Others
2-7 Commissions to be Paid Solely by Broker
2-8 Commissions Cannot be Paid to an Unlicensed Llc

Chapter 3: Agency
3-1 Broker as a Fiduciary
3-1:1 Duty to Principal
3-1:2 Duty to the Other Party in the Transaction
3-2 Subagency
3-3 Creation of Additional Real Estate Brokerage Agency Relationships
3-4 Consumer Information Statements
3-4:1 General
3-4:2 Applicable Transactions
3-4:3 Definitions
3-4:4 Timing to Deliver Consumer Information Statement and Disclose Agency Relationships
3-4:5 Mandatory Text
3-4:6 Acknowledgement of Receipt in Brokerage Agreements
3-4:7 Acknowledgment of Receipt in Offers, Contracts and Leases
3-4:8 Broker as Property Owner
3-4:9 Optional Provisions
3-5 Seller’s Agent
3-6 Buyer’s Agent
3-7 Disclosed Dual Agent
3-8 Transaction Broker
3-9 Conflicts of Interest
3-9:1 Statutory Prohibitions
3-9:2 Regulatory Prohibitions
3-9:3 Mortgage Transactions
3-9:4 Placement of Insurance
3-9:5 Effect of Failure to Disclose Conflict
3-10 Legal Advice for Buyers and Sellers

Chapter 4: Disclosures to Consumers
4-1 Information Concerning the Physical Condition of the Property
4-1:1 Regulations
4-1:2 Caselaw
4-2 The Consumer Fraud Act
4-3 Social Conditions and Psychological Impairments of a Property
4-4 Law Against Discrimination
4-4:1 Provisions Applicable to Real Estate Licensees
4-4:2 Commission’s Implementing Regulations
4-4:3 Attorney General’s Required LAD Notice
4-5 Megan’s Law
4-5:1 Background
4-5:2 Classifications of Sex Offenders
4-5:3 Statutory Prohibition Against Disclosure About Sex Offenders
4-5:4 The State Police Website
4-5:5 Restrictions on the Use of Information About Sex Offenders
4-5:6 Commission’s Regulations
4-6 Contracts of Sale and Leases
4-7 Listing Agreements
4-8 Consumer Information Statements
4-9 Mortgage Financing Services
4-9:1 General
4-9:2 Written Disclosure to Buyers
4-9:3 Disclosure by Seller’s Agent and Subagent to Seller
4-9:4 Disclosure by Seller’s Agent to Buyer
4-9:5 Maintaining Copies of Disclosure Statements
4-10 Affiliation With Mortgage Lender or Broker
4-10:1 Written Disclosure Required
4-10:2 Definition of Affiliated Relationship
4-10:3 Individual or Corporate Affiliation With Lender or Mortgage Broker
4-10:4 Combining Commission and RESPA Disclosures
4-10:5 Maintaining Copies of the Disclosures
4-11 Fairness Foreclosure Act
4-12 Short Sales
4-13 Air Safety and Zoning Act
4-14 Lead-Based Paint
4-15 Child-Protection Window Guards
4-16 Rebates to Buyers
4-17 Private Well Testing
4-18 Off-Site Conditions
4-19 Fair Credit Reporting Act
4-20 Truth-In-Renting Act

Chapter 5: The Unauthorized Practice of Law
5-1 General
5-2 Residential Real Estate Transactions
5-2:1 The Attorney-Review Clause
5-2:2 Opinion 26
5-2:3 Opinion 26 Is Inapplicable to Personal Transactions of Licensees
5-2:4 Opinion 716/45
5-3 Preparation of Commercial Real Estate Contracts
5-4 Real Estate Commissions
5-5 Other Acts That Constitute the Unauthorized Practice of Law
5-5:1 The Plain Language Act
5-5:2 Appearance Before a Planning Board or Other ­Quasi-Judicial Body
5-6 Penalties

Chapter 6: The Attorney-Review Clause
6-1 The Reason Attorney Review was Created
6-2 Essential Terms of the Attorney-Review Clause
6-3 Interpretation of Attorney Review by the Courts
6-4 Offers Received During and After Attorney Review
6-5 When Attorney Review Begins to Run
6-6 Shortening the Attorney-Review Period
6-7 Attorney Approval of Partially Signed Contracts
6-8 Effect of Cancellation Clause in the Planned Real Estate Development Full Disclosure Act
6-9 Effect of Disapproval on a Broker’s Commission

Chapter 7: Listing Agreements
7-1 General
7-2 Types of Listing Agreements
7-2:1 General
7-2:2 Open Listing Agreement
7-2:3 Exclusive Agency Listing Agreement
7-2:4 Exclusive Right to Sell Listing Agreement
7-2:5 Multiple Listing Agreement
7-2:6 Option Listing Agreement
7-2:7 Net Listing Agreement
7-3 Regulations Regarding Listing Agreements
7-3:1 Predetermined Fees or Commissions
7-3:2 Required Provision Concerning Negotiable Commissions
7-3:3 Net Listings Prohibited
7-3:4 Identity of Multiple Listing Service
7-3:5 Termination Date
7-3:6 Commission Splits
7-3:7 Waiver of Broker Cooperation
7-3:8 Law Against Discrimination
7-3:9 Delivery of Listing Agreement to Seller
7-3:10 Mortgage Financing Services
7-4 Unilateral Brokerage Contracts
7-5 Invalid Listing Agreements
7-5:1 Listing Agreements Voidable
7-5:2 License Required to Enforce Listing Agreement
7-6 Interpretation of Listing Agreements
7-6:1 Agreements Strictly Construed
7-7 Seller’s Right to Withdraw Property From the Market
7-8 The Statute of Frauds
7-8:1 The Statutory Requirements
7-8:2 Non-Contractual Theories to Avoid The Statute of Frauds
7-8:3 Independent Tort Theories Are Not Barred
7-8:4 Strict Compliance Generally Is Required
7-9 Effect of Specific Provisions
7-9:1 Contingency in Listing Agreement
7-9:2 Effect of Selling Price in the Listing Agreement
7-9:3 Express Right to Terminate the Listing Agreement
7-10 Listing Agreements With Counties or Municipalities

Chapter 8: Broker’s Recovery of ­Commissions and Other Compensation
8-1 Real Estate License as a Requirement to Collect a Commission
8-1:1 Statutory Requirement
8-1:2 Interpretation by Courts
8-1:3 Exceptions to the License Requirement
8-2 General Requirements for a Commission Claim
8-3 Alleged Buyer Default
8-4 Alleged Seller Default or Wrongdoing
8-5 Tortious Interference With Broker’s Right to a Commission
8-6 Quantum Meruit for Value of Services
8-6:1 Seller Withdrawing Property From the Market
8-6:2 Recovery Where the Statute of Frauds Is Not Satisfied
8-7 Commission for Leasing Property
8-7:1 The VRG Decision
8-7:2 The Pagano Decision
8-7:3 Other Decisions
8-8 When a Purchase Contract Differs From the Listing Agreement or Terms Negotiated by the Broker
8-9 Broker Misconduct or Noncompliance With Regulations or Statutes
8-10 Corporate Shareholder and Officer Liability
8-11 Options to Purchase
8-12 Lapse of Time
8-13 Equitable Liens
8-13:1 Cohen v. Estate of Sheridan
8-13:2 Recording Equitable Liens
8-13:3 Priority of Equitable Liens
8-13:4 Effect of Seller Filing Bankruptcy
8-14 Co-Brokerage
8-15 Short Sales
8-16 Right of first Refusal

Chapter 9: Bases for Broker Liability
9-1 Breach of Fiduciary Duty
9-2 Common Law Fraud or Misrepresentation
9-3 The Consumer Fraud Act
9-3:1 General
9-3:2 Amendment to Include Real Estate Licensees
9-3:3 Liability for Innocent Misrepresentations
9-3:4 Liability for Intentional Misrepresentations
9-3:5 Liability for Failing to Disclose Information
9-3:6 Penalties for Violating the Act
9-3:7 Exception to Treble Damages and Attorneys’ Fees
9-3:8 Inapplicable to Personal Transactions of Licensees
9-4 The Condition or Use of the Property
9-4:1 Open Houses
9-4:2 Short-Term Rentals
9-4:3 Inspections
9-5 Other Potential Bases for Liability
9-5:1 Violation of Tenants’ Rights in Foreclosures
9-5:2 Recommending Lenders and Other Professionals
9-5:3 Presenting Offers During and After Attorney Review
9-5:4 Invasion of Privacy
9-6 Punitive Damages and Attorneys’ Fees
9-7 Successor Liability for Brokers

Chapter 10: The New Jersey Real Estate Commission
10-1 Membership of the Commission
10-2 Personnel of the Commission
10-3 Organization of the Commission
10-4 Commission Records
10-4:1 Public Records Maintained by the Commission
10-4:2 Commission Records Not Available to the Public
10-4:3 Sealed Records as Evidence
10-5 Implementation of the Real Estate Sales Full Disclosure Act
10-5:1 General
10-5:2 New Jersey Brokers Representing Applicants and Registrants
10-6 Implementation of the Real Estate Timeshare Act
10-7 Rulemaking and Petitions for Rulemaking
10-7:1 Notice of Proposed Adoption of New Rule or Amendment or Repeal of Existing Rule
10-7:2 Comments Concerning Proposed Rule Changes
10-7:3 Public Hearings Concerning Rule Changes
10-7:4 Procedure for Submitting Petitions for Rulemaking
10-7:5 Procedure to Consider and Dispose of Rulemaking Petitions
10-8 Procedures for Disciplinary Actions, Contested Applications and Declaratory Ruling Requests
10-8:1 Types of Pleadings
10-8:2 Notice of Proposed License Suspension or Revocation
10-8:3 Answers
10-8:4 Adversarial Hearing
10-8:5 Motions
10-8:6 Emergent Hearing Procedures
10-8:7 Sanctions for Failure to Appear or Comply With an Order
10-8:8 Settlements
10-8:9 Motions for Reconsideration
10-8:10 Decisions in Enforcement Actions
10-8:11 Applications to Temporarily Suspend a Licensee
10-8:12 Procedure to Appeal Initial Denial of a Licensing Application
10-8:13 Appeal of License Suspension of Revocation

Chapter 11: Education and Licensing ­Requirements for Brokers, Salespersons and Salespersons Licensed With a Real Estate Referral Company
11-1 Education
11-1:1 General Education Requirements
11-1:2 Salesperson’s and Salesperson Licensed With a Real Estate Referral Company’s License Education Requirements
11-1:3 Broker’s License Education Requirements
11-1:4 Continuing Education
11-2 Licensing
11-2:1 General Requirements
11-2:2 Examination Rules
11-2:3 Salesperson’s and Salesperson Licensed With a Real Estate Referral Company’s License
11-2:4 Broker and Broker-Salesperson License
11-2:5 Salesperson Licensed With a Real Estate Referral Company Obtaining a Broker’s or Salesperson’s License
11-2:6 Failure to Maintain or Renew a License
11-2:7 Licensure Forms
11-2:8 License Application and Other Deadlines
11-2:9 Applicable Fees for Licensure

Chapter 12: Real Estate Schools
12-1 Introduction
12-2 Licensing Requirements For Schools
12-2:1 General
12-2:2 Applications, Fees and Background Checks
12-2:3 School’s Name
12-2:4 Offices and Teaching Facilities
12-2:5 School Policy and Regulations
12-2:6 Director of The School
12-3 Licensing Requirements For Instructors
12-3:1 Applications, Fees and Background Checks
12-4 Instructors And Guest Lecturers
12-5 Recruitment Of Students by Brokers at Schools
12-5:1 Written Notice of Nonsolicitation Required
12-5:2 School Personnel Prohibited From Soliciting Students
12-5:3 Promises of Reduced Tuition or Employment
12-5:4 Advertisements
12-5:5 Schools in a Broker’s Office
12-6 Brokerage or Related Activites by Students
12-7 Tuition
12-8 Disabled and Transfer Students
12-9 Recordkeeping
12-10 Standard for Students to Pass Courses
12-11 Advertisements
12-12 Closing of School
12-13 Revocation or Suspension of Real Estate School or Instructor Licenses
12-14 Role of Commission’s Education Bureau
12-14:1 General
12-14:2 Forms
12-14:3 Fees
12-15 Americans With Disabilities Act

Chapter 13: Maintaining Brokerage Offices
13-1 Supervision of Office
13-2 Offices in Residences
13-3 Sole Proprietors
13-4 Branch Offices

Chapter 14: Broker’s Trust Accounts and Recordkeeping
14-1 Accounts for Funds of Others
14-1:1 Special Accounts
14-1:2 Commingling Funds
14-1:3 Deposit of Funds
14-1:4 Signatories on Escrow and Trust Accounts
14-1:5 Payments to be Held in Escrow or Trust
14-1:6 Credit Card Payments
14-1:7 Adequate Safeguards for Funds
14-1:8 Advanced Fees for Brokers
14-2 Maintaining Records
14-2:1 Timeframe for Keeping Records
14-2:2 Deposits and Withdrawals
14-2:3 Cash Receipts
14-2:4 Ledger and Other Documents
14-2:5 Production of Documents to the Commission
14-2:6 Storing Documents on Disks or Tapes

Chapter 15: Trade Associations and ­Multiple Listing Services
15-1 Regulatory Restrictions on Membership
15-2 Trade Associations
15-2:1 The National Association of REALTORS®
15-2:2 The New Jersey REALTORS®
15-2:3 Local Boards/Associations of REALTORS®
15-2:4 Other Trade Associations
15-3 Multiple Listing Services
15-3:1 General
15-3:2 Advertising
15-3:3 Antitrust

Chapter 16: Real Estate Commission and Other Advertising Rules
16-1 Broker’s Place of Business
16-1:1 Signs at the Broker’s Office
16-1:2 References in Advertising to the Broker’s Office
16-2 Proper Use of Names
16-3 Webpages
16-4 Telephone Numbers
16-5 Franchises
16-6 Membership in Multiple Listing Services
16-7 Home Warranty Offers
16-8 Free, Discounted, or Other Services or Products
16-9 Properties Listed With Another Broker
16-10 Properties “Sold” or “Under Contract”
16-11 Commissions Rates
16-12 Business Cards
16-13 Loan Information
16-14 Location of the Property for Sale or Lease
16-15 Discriminatory Language
16-16 Licensure by the Commission
16-17 False, Misleading or Deceptive Claims
16-18 Lotteries, Contests and the Like
16-19 Rebates
16-20 Real Estate Sales Full Disclosure Act
16-21 Real Estate Timeshare Act
16-22 Market Analyses and Price Opinions
16-22:1 Comparative Market Analyses/Broker Price Opinions
16-22:2 Appraisals
16-22:3 NAR’s Code of Ethics Regarding Price Opinions
16-23 Charitable Contributions
16-24 Social Media
16-25 Additional Referral Agent Regulations

Chapter 17: Commission ­Regulations and Other ­Requirements ­Regarding Contracts of Sale and Leases
17-1 Memorializing Offers and ­Counter-Offers in Writing
17-2 Predetermined Fees or Commissions
17-3 Required Provisions in Contracts of Sale and Leases
17-3:1 Attorney Review
17-3:2 Off-Site Conditions
17-3:3 Megan’s Law
17-3:4 Opinion 26
17-3:5 Licensee’s Disclosure of Interest as Seller or Buyer
17-3:6 Real Estate Sales Full Disclosure Act
17-3:7 Private Well Testing
17-3:8 Lead-Based Paint
17-4 Duty To Submit Offers
17-5 Back-Up Offers
17-6 A Broker’s Declaration of Business Relationship
17-7 Americans With Disabilities Act
17-8 Bulk Sales Law

Chapter 18: Prohibited Activities
18-1 Section 17 of the Real Estate License Act
18-1:1 False Promises
18-1:2 Representing Multiple Parties
18-1:3 Flagrant Misrepresentations
18-1:4 Failure to Account for Money
18-1:5 Conduct Demonstrating Unworthiness, Incompetency, Bad Faith or Dishonesty
18-1:6 Providing Listing Agreements to Clients
18-1:7 Lotteries, Contests, Games, Etc.
18-1:8 Criminal Convictions
18-1:9 Collecting a Commission While Being Paid by Another Party
18-1:10 Use of Trade Names
18-1:11 Paying Rebates or Compensation to Unlicensed Persons
18-1:12 Other Fraudulent Acts
18-1:13 Accepting Payment From any Person Other Than a Broker
18-1:14 Fraudulent Procurement of a License
18-1:15 Commingling Funds
18-1:16 Disclosure of Interest in Property to be Sold
18-1:17 Disclosure of Interest in Property to be Purchased
18-1:18 Referral Fees for Rental Housing
18-1:19 Notifying the Commission About a Criminal Charge or Conviction or a License Suspension or Revocation
18-1:20 Violation of Statute or Commission Regulations
18-1:21 Procedural Issues
18-1:22 Penalties
18-2 Kickbacks
18-2:1 Real Estate Commission Regulations
18-2:2 Real Estate Settlement Procedures Act
18-3 Dual Compensation
18-4 In-House Mortgage Services
18-5 Blockbusting
18-6 Discriminatory Commission Splits
18-7 Pressuring Media
18-8 Fixing Commissions
18-8:1 Real Estate Commission Prohibition
18-8:2 Antitrust Implications
18-9 Acting as a Debt Adjuster
18-10 Sale of Mobile or Manufactured Homes
18-11 Mortgage Assistance Relief Services Rule

Chapter 19: Discipline of Real Estate ­Licensees
19-1 Section 17 of the Real Estate License Act
19-2 Real Estate Commission Sanctions Imposed
19-3 Procedural Issues
19-4 Freezing a Broker’s Assets and Paying Funds into Court
19-5 Conviction of Certain Offenses
19-6 Suspension of License
19-7 Effect of Revocation of Salesperson or Broker-Salesperson License on Broker
19-8 Real Estate Guaranty Fund

Chapter 20: Disclosure of Off-Site Conditions
20-1 Early Duty to Disclose Off-Site Conditions
20-2 The New Residential Construction Off-Site Conditions Disclosure Act
20-3 Regulations Regarding New and Other Construction
20-4 Varying the Notice Language in the Act

Chapter 21: The Real Estate Settlement Procedures Act
21-1 General
21-2 Covered Transactions
21-2:1 Loans Secured by a Lien
21-2:2 One to Four Family Dwellings
21-2:3 Federally Related Lenders
21-2:4 Federally Related Loans
21-2:5 Lender as a Creditor
21-2:6 Transactions That Are Exempt
21-3 Referral Fees and Unearned Fees Prohibited
21-3:1 Referral Fees
21-3:2 Unearned Fees
21-3:3 Excluded Transactions
21-3:4 Affiliated Business Arrangements
21-3:5 Recordkeeping
21-3:6 Sanctions
21-4 Requiring a Specific Title Company
21-5 Enforcement Actions
21-5:1 Jurisdiction of Courts
21-5:2 The Statute of Limitations
21-5:3 Defenses
21-5:4 Liens

Chapter 22: The Fair Housing Act
22-1 General
22-2 Protected Classes
22-2:1 Race, Color or National Origin
22-2:2 Sex
22-2:3 Religion
22-2:4 Familial Status
22-2:5 Handicap
22-2:6 Persons Providing Assistance
22-2:7 Additional Protected Classes in New Jersey
22-3 Exceptions
22-3:1 Single-Family Houses
22-3:2 Mrs. Murphy
22-3:3 Private Clubs and Religious Organizations
22-3:4 Maximum Occupancy Requirements
22-3:5 Housing for Older Persons
22-4 Discriminatory Activities
22-4:1 Steering
22-4:2 Redlining
22-4:3 Misrepresenting Unavailability
22-4:4 Contract Terms
22-4:5 Blockbusting
22-4:6 Applicability of the Disparate Impact Test
22-5 Advertising
22-6 Membership in Trade and Other Organizations
22-7 Enforcement
22-7:1 The Department of Housing and Urban Development
22-7:2 Private Persons
22-7:3 Private Organizations
22-8 Penalties

Chapter 23: Lead-Based Paint Disclosures
23-1 Enactment of the Residential Lead-Based Paint Hazardous Reduction Act
23-2 Types of Housing Effected by the Act
23-3 Responsibilities of Real Estate Agents
23-4 Sellers’ and Lessors’ Responsibilities
23-5 Mandatory Warning Statements
23-5:1 Contracts of Sale
23-5:2 Leases
23-5:3 Acknowledgement of The Disclosure
23-6 Penalties
23-7 Renovations to Properties With ­Lead-Based Paint
23-7:1 Information Distribution Requirements
23-8 New Jersey Law

Table of Cases  
Table of Statutes and Codes