Key Takeaways
- Violations of New Jersey license law can result in fines, suspension, or revocation
- Common violations include trust account mishandling, failure to supervise, and misrepresentation
- NJREC investigates complaints and conducts hearings through administrative law process
- Licensees have the right to a hearing before an Administrative Law Judge
- The Real Estate Guaranty Fund provides limited compensation to victims of licensee misconduct
Last updated: January 2026
New Jersey License Law Violations and Discipline
NJREC has authority to discipline licensees for violations of the Real Estate License Act and Commission rules.
Types of Violations
Common Violations
| Category | Examples |
|---|---|
| Trust Account | Commingling, conversion, late deposits |
| Supervision | Failure to oversee salespersons |
| Disclosure | Failing to disclose material facts |
| Misrepresentation | False statements about property |
| Advertising | Misleading ads, missing broker ID |
| Unlicensed Activity | Practicing without valid license |
| Agency Violations | Failing to provide CIS |
Specific Prohibited Acts
Under N.J.S.A. 45:15-17, violations include:
- Fraud or misrepresentation in obtaining a license
- Making false promises to influence transactions
- Demonstrating unworthiness to act as licensee
- Acting for more than one party without disclosure
- Commingling of trust and personal funds
- Failing to remit funds owed
- Paying commissions to unlicensed persons
- Failing to provide required disclosures
- Discrimination in violation of fair housing
- Conviction of crime involving moral turpitude
Disciplinary Process
Investigation
NJREC initiates investigations based on:
- Consumer complaints
- Audits
- Referrals from other agencies
- Self-reporting
Process Steps
| Step | Description |
|---|---|
| Complaint filed | Consumer or agency reports violation |
| Investigation | NJREC staff reviews |
| Notice | Licensee notified of charges |
| Hearing | Before Administrative Law Judge |
| Decision | Judge issues initial decision |
| Commission action | NJREC adopts, modifies, or rejects |
| Appeal | Licensee can appeal to court |
Penalties and Sanctions
Available Sanctions
| Sanction | Description |
|---|---|
| Reprimand | Official warning on record |
| Fine | Monetary penalty |
| Suspension | Temporary loss of license |
| Revocation | Permanent loss of license |
| Probation | License with conditions |
| Education | Required additional coursework |
| Restitution | Repay wronged party |
Fine Amounts
Fines vary based on:
- Severity of violation
- Prior violations
- Harm to consumers
- Willfulness of conduct
Real Estate Guaranty Fund
New Jersey has a Real Estate Guaranty Fund to compensate victims:
Fund Details
| Feature | Detail |
|---|---|
| Purpose | Compensate victims of licensee misconduct |
| Source | Licensee fees |
| Maximum per claim | Limited amount |
| Conditions | Civil judgment required |
| Effect on licensee | License suspended until fund repaid |
How to Claim
- Obtain civil judgment against licensee
- Show licensee cannot pay judgment
- File claim with NJREC
- Fund pays up to limit
- Licensee's license suspended
Hearing Rights
Licensees facing discipline have rights:
| Right | Description |
|---|---|
| Written notice | Detailed charges |
| Hearing | Before Administrative Law Judge |
| Representation | Right to attorney |
| Evidence | Present witnesses and documents |
| Cross-examine | Question opposing witnesses |
| Appeal | Challenge decision in court |
Criminal Violations
Some violations may also be criminal:
| Criminal Act | Potential Charge |
|---|---|
| Conversion of funds | Theft/embezzlement |
| Fraud | Criminal fraud |
| Operating without license | Criminal penalty |
| False statements | Perjury or fraud |
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Test Your Knowledge
What happens to a licensee's license if the Real Estate Guaranty Fund pays a claim against them?
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Test Your Knowledge
Where do licensees facing disciplinary action have their initial hearing?
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D