A New Jersey licensed salesperson, Tom, accepts a referral fee directly from a mortgage lender after recommending the lender to his client during a home purchase transaction. Tom's broker was not informed of this arrangement. Under the New Jersey Real Estate License Act, which of the following best describes the consequences Tom may face?
Correct Answer
D) Tom may face disciplinary action by the NJREC because salespersons may only receive compensation through their supervising broker
Under N.J.S.A. 45:15-16.2 and the License Act's supervision requirements, a licensed salesperson may only receive compensation through their supervising broker. Accepting a referral fee or any compensation directly from a third party — including a mortgage lender — without routing it through the broker is a violation of NJ license law. This rule ensures broker oversight of all compensation received by affiliated licensees and protects consumers from undisclosed financial conflicts of interest.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
Continuing education (CE) refers to the ongoing coursework that licensed real estate professionals must complete during each renewal cycle to maintain an active license. CE ensures agents stay current with changes in laws, regulations, and industry practices.
The National Do Not Call Registry is a federal program administered by the FTC that allows consumers to opt out of receiving unsolicited telemarketing calls, including calls from real estate agents soliciting business.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
In Wyoming real estate practice, a first-time salesperson applicant completes coursework. What should the licensee remember?
A Wyoming licensee is reviewing an out-of-state salesperson applicant prepares for testing. What is the best answer?
In Wyoming real estate practice, a salesperson applicant age is reviewed. What should the licensee remember?
A responsible broker in Wyoming asks about a nonresident applicant provides home-state evidence. Which answer follows Wyoming law?
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- → For the Wyoming salesperson state portion, a licensee asks how long Wyoming renewal periods are. Which statement is correct?
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