A licensed New Jersey broker, Helen, is also a licensed attorney. She represents a seller in a complex commercial real estate transaction, performing both legal and real estate brokerage services. Helen charges a single combined fee for both services. A dispute later arises, and the buyer's attorney argues that Helen violated the License Act by not maintaining separate accounts for her legal fees and brokerage commission. Under New Jersey law, which of the following most accurately describes Helen's obligations?
Correct Answer
D) Helen must maintain separate trust accounts for client real estate funds under the License Act, regardless of her dual role as attorney and broker, and is subject to NJREC oversight for her brokerage activities
When a licensed attorney also holds a real estate broker's license and actively performs brokerage services (not merely incidental legal work), they are subject to the NJREC's rules for brokerage activities, including trust account requirements. The attorney exemption under N.J.S.A. 45:15-3 applies when legal work is the primary service and real estate activity is incidental. When Helen actively functions as a broker — marketing the property, negotiating as a broker, and earning a brokerage commission — she is subject to the License Act's trust account and conduct requirements for that brokerage function, in addition to her obligations under the Rules of Professional Conduct as an attorney.
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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.
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