Managing property in New Jersey? Are you in compliance?
Property Management in New Jersey
An estimated 9 million people live in New Jersey. About 36% of those live in rental properties, according to the latest census data. That means more than 3 million residents live in multifamily units in New Jersey. Property Management in the Garden State is a booming business. But investors and property managers need to protect their assets by understanding and following all state housing compliance laws.
If you’re a property owner or manager in New Jersey, make sure you’re observing local housing regulations. Violations can be costly. At Designated Broker Solutions, our licensed brokers will help you protect your investments, manage your properties, and make sure you’re following New Jersey housing laws.
Multifamily Property Management Regulations in New Jersey
New Jersey real estate licensing laws require multifamily property managers to have a real estate broker’s license if they are leasing, collecting rent, or negotiating contracts. A salesperson working at the direction of a real estate broker may also perform these real estate activities. However, unlicensed assistants and other support staff cannot perform any actions related to leasing, marketing, negotiating rent term, or showing the property to potential tenants.
Property owners in New Jersey do not have to be licensed brokers to manage their own property.
Getting a Broker License or Salesperson License in New Jersey
Becoming a licensed real estate broker in New Jersey is a two-step process. First, applicants must complete the Real Estate Salesperson requirements as outlined by the NJ Real Estate Commission:
18 years of age or older
Completed high school
75 hours of coursework at a licensed real estate school
Complete an extensive salesperson licensing exam
Apply for a salesperson license through a sponsoring real estate broker
Demonstrate “honesty, trustworthiness, character and integrity” to the Real Estate Commission
A Real Estate Salesperson may only perform so-called “real estate activities” of property management (leasing, showing properties, negotiating contracts, etc.) at the direction of a licensed managing broker.
To become a licensed Real Estate Broker in New Jersey, applicants must first complete the Salesperson licensing requirements, then be active as a full-time Salesperson for three years immediately preceding the Broker licensure course.
In addition to the original requirements to become a Salesperson, a Broker candidate must complete the following:
75 additional hours of additional pre-licensure coursework (150 hours total)
Complete a 90-hour general real estate course
Complete two 30-hour courses on Ethics and Agency, Management, and other related topics
Submit coursework and experience reports to the New Jersey Real Estate Commission
Take and pass an extensive Real Estate Broker licensing exam
New Jersey does not have reciprocity with other states.
Obtaining a Real Estate Broker license can take four years or more and cost thousands of dollars.
Unique New Jersey Property Management Laws
New Jersey landlord-tenant laws provide specific guidelines that property managers must follow. (For more information on these laws, click here).
First, property managers in New Jersey must observe state-mandated Fair Housing guidelines. In addition to the protections covered by the 1968 Federal Fair Housing Act, New Jersey also prohibits discrimination based on sexual orientation, gender identity, and marital status, among others. It is also illegal to refuse to rent to someone simply because they will pay with Section 8 vouchers. Violating fair housing laws could lead to hefty fines or legal challenges.
New Jersey places a limit on security deposits. Landlords may not charge more than one and a half times the amount of monthly rent as a security deposit.
Property managers, landlords, and any associated contractors must have explicit permission from the tenant before entering the residence, except in the case of an emergency.
Property managers who oversee buildings with three or more rental units must abide by the New Jersey Hotel and Multiple Dwelling Health and Safety Code. Most towns in New Jersey have added protections to ensure tenant health and safety. Tenants have the right under New Jersey law to break a lease and move out of the property if the landlord or property manager refuses to make necessary repairs even after written requests have been made. In most instances, landlords will not be entitled to keep the security deposit and will not be owed remaining rent payments.
Eviction and Price Increases in New Jersey
New Jersey housing laws provide detailed guidelines for property managers planning to raise rent or evict tenants. The law is very pro-tenant, making rent increases and evictions difficult for property managers.
First, the Anti-Eviction Act protects tenants from unreasonable evictions. It also prohibits “unconscionable” rent increases that would cause undue financial stress on a tenant. The law outlines very detailed steps landlords and property managers must take before raising rents or serving an eviction notice.
Cities like Newark have implemented rent control programs to ensure affordable housing is available to all residents. Other municipalities have followed suit. Property managers should know the rent regulations in their local area.
Designated Broker Solutions and New Jersey Property Management
Noncompliance is costly. Penalties range from $100-per-violation fines to upwards of $100,000 for repeated offenses, not to mention legal fees and reparations.
Protect your investment; stay compliant. At Designated Broker Solutions, we offer a New Jersey-licensed broker who is ready to help you get your rental business off the ground. Waiting for a local staff member to obtain a Broker License is expensive and can take months or even years. Our brokers are experienced professionals who are familiar with New Jersey housing regulations. We will handle all the necessary paperwork, train the local staff, and ensure your business remains fully compliant – and we will get started right away.
Our brokers are licensed in 27 states, so whether you’re operating solely in New Jersey or own properties in multiple locations, we can help you keep your properties protected. Our staff will perform regular internal audits to ensure continuing compliance
Contact us to learn how we can help protect your real estate investments in New Jersey or wherever your real estate business takes you.