N.J. Admin. Code § 11:5-2.2

Current through Register Vol. 56, No. 21, November 4, 2024

Section 11:5-2.2 - Licensed schools and instructors; requirements

(a) The following regulations are applicable to schools and instructors licensed to conduct prelicensure courses of education in real estate subjects pursuant to 45:15-10.4 and 10.5, to applicants for such licenses and, as applicable, to the conducting of continuing education courses by such schools and instructors pursuant to 11:5-12.1.

1. The original license term for pre-licensure course instructors and schools shall begin on July 1, 1994 and terminate on February 28, 1997. Thereafter, each two-year license term for school and instructor licenses shall run from March 1 to the last day of February of the second following year.

(b) The Commission shall require any school or instructor in making application for licensure to submit certain documents, statements and forms which shall form the basis for the Commission's judgment whether to grant a license. Where the Commission initially denies an application for a school or instructor license, it shall provide to the applicant notification in writing with reasons for such action. The applicant may appeal such a decision to the full Commission. 11:5-11.1 0 shall be applicable to all such appeals.

(c) Public adult education programs conducted under the auspices of a board of education in this State and any college or university accredited as such by the State Department of Higher Education shall be presumed to be qualified providers of real estate courses, so long as their real estate prelicensure education program is under the direction of a licensed instructor or other qualified individual who has affirmatively demonstrated to the Commission his or her good moral character and has met the other requirements of 45:15-10.9.

(d) Except as provided in (c) above, all other applicants for a license to operate a real estate prelicensure school, and in the case of a corporation, or limited or general partnership, the members, officers, directors and owners of a controlling interest thereof, shall demonstrate their good moral character, including the absence of any conviction for the crimes or other offenses specified under the provisions of 45:15-12.1. The Commission may make such further investigation and require such proof as it deems proper as to the honesty, trustworthiness, character and integrity of an applicant.

(e) When a school is to be conducted in the name of a corporation, a certified copy of its certificate of incorporation shall accompany the application for licensure. When a school is to be conducted under a trade name, whether a sole proprietorship, firm, general partnership, or limited partnership, a true copy of the certificate of trade name or articles of the general or limited partnership as filed in the office of the county clerk shall accompany the application. A school shall not use the designation of "College" or "University," as part of its name or in any other manner, unless it, in fact, meets the standards and qualifications of the State agency having jurisdiction and has been approved by that agency.

(f) Every school licensed by the Commission shall maintain a bona fide office open to the public during normal business hours for the purpose of assisting former and current students. Schools shall provide adequate space, seating, equipment and instructional materials for their students. The premises, equipment and facilities of the school shall comply with all local, city, county and State regulations, such as fire codes, building and sanitation codes. A certificate from a proper authority evidencing compliance with these requirements shall accompany an application for school licensure. The Commission may require proof of ownership or a copy of the lease if the facility is rented. Public adult education programs conducted under the auspices of a board of education in this State and any college or university accredited as such by the New Jersey Commission on Higher Education, the facilities of which have been approved by a State agency, shall be presumed to have met the requirements of this paragraph, so long as the real estate courses offered are held at the approved facility.

1. Any additional teaching locations must be licensed by the Commission and must comply with all the requirements applicable to licensed schools, their directors and instructors as set forth in the Act and this rule. School directors shall have oversight responsibility for these locations. All prelicensure courses conducted at such locations must be taught by licensed instructors or guest lecturers, pursuant to 45:15-10.5 and this rule. All continuing education courses conducted at such locations shall be taught by licensed instructors or by individuals approved as continuing education instructors pursuant to 11:5-12.1 0.

(g) All schools shall furnish to the Commission at the time of application for initial licensure the school policy and regulations pertaining to standards for satisfactory completion of the courses offered at the school and the issuance of a Certificate, conditions for dismissal of a student and conditions for reinstatement.

1. Any changes in school policy and regulations, as set forth in (g) above, from the information submitted with the original application for school licensure or as otherwise previously supplied, shall be disclosed to the Commission within 10 business days in writing, or on a form which the Commission prescribes.

(h) When a school fulfills all of the requirements for licensure, then a license shall be executed by the President of the Commission as attested by the Executive Director. School licensure shall be limited to the specific ownership and school locations identified on the license document(s).

(i) An individual seeking approval as a director of a licensed real estate school administered by a public adult education program or an accredited college or university who is not licensed as a real estate instructor may nevertheless qualify as the director of such a school, so long as he or she is at least 18 years of age; has a background of good moral character, including the absence of any conviction for the crimes or other offenses specified under the provisions of 45:15-12.1; and has fulfilled all of the education requirements imposed upon candidates for licensure as real estate instructors within two years of applying to the Commission for approval to be the director of such a school.

(j) In order to enable the Commission to confirm that courses offered by real estate schools include the required number of hours of instruction as prescribed in 45:15-10.1(a) and (b) and 11:5-2.1, every six months, each school director shall submit data on courses to be offered by their school in the forthcoming six month period, the starting and ending dates of the courses, the days and hours of class sessions and teaching locations. Such course information shall be provided on forms prescribed by the Commission and shall be retained as permanent records for not less than three years after submission.

(k) No person, other than a guest lecturer, shall teach real estate education courses, the attendance and successful completion of which shall constitute the fulfillment of the educational prerequisites for licensure established under 45:15-10.1, unless that person is licensed as an instructor pursuant to 45:15-10.5 and this section.

1. Each applicant for licensure as a real estate instructor shall be 18 years of age or older and shall have a background of good moral character, including the absence of any conviction for those certain crimes or other like offenses referred to in 45:15-12.1, subject to the applicant's ability to affirmatively demonstrate his or her rehabilitation from such conviction. In order to confirm the absence of any such conviction, the Commission shall require all non-attorney applicants to submit with their application for instructor licensure a New Jersey State Police Request for Criminal History Record Information Form and a certified check or money order in the amount established by the New Jersey State Police as the processing fee for such forms.

2. Each applicant for licensure must hold a bachelor's degree from an accredited college or university, except for the following applicants:

i. New Jersey licensed brokers who have been continuously licensed as such for the two years immediately preceding their application; and

ii. Licensed brokers from other states who have been continuously licensed as such for the three years immediately preceding their application.

3. Except as provided in (l)3i and ii below, all instructor license applicants must successfully complete all of the education requirements for licensure as a New Jersey broker established at N.J.A.C. 11:5-2.1, totaling 150 hours, not more than one year prior to passing the instructor license examination and applying for an instructor license.

i. New Jersey broker licensees who have been licensed as such for at least the two years immediately preceding the application and who have completed the full 150 hours of broker prelicensure courses established at 11:5-2.1 shall be deemed to have fulfilled the education requirements for licensure as an instructor.

ii. The following individuals will not be required to take the 90-hour general broker course but must successfully complete the two 30-hour broker prelicensure courses referred to in 11:5-2.1 in order to fulfill the instructor prelicensure education requirements:

(1) New Jersey broker licensees who have been licensed as such for the two years preceding their application for an instructor license but who have not previously completed those two courses; and

(2) Licensed brokers from other states who have been licensed as such for the three years immediately preceding application.

4. All instructor license applicants shall successfully complete an instructor license examination as established by the Commission. The examination shall extensively test the applicant's general real estate knowledge and shall include questions on teaching methods. Applicants are advised to engage in independent study and/or to take courses offered by independent providers on teaching methods.

5. Subsequent to passing the instructor license examination, as a prerequisite to being issued an instructor license, all applicants must attend a seminar conducted by or under the direction of the Commission staff covering Commission and licensing procedures. Such seminars shall not exceed one day in length.

(l) Regulations applicable to the renewal of school and instruction licenses are as follows:

1. Pursuant to 45:15-10.7, the fee for the renewal of a real estate instructor license for an additional two-year license term shall be $ 100.00. The fee for the renewal of a real estate school license shall be $ 400.00 for the first teaching location licensed and $ 200.00 for each additional licensed location to be renewed.

2. As a prerequisite for the renewal of an instructor license, an instructor must attend a Commission-sponsored seminar updating them on recent developments affecting the real estate brokerage business in New Jersey. Such seminars shall be offered on a minimum of two dates, each in a different location throughout the state, during the second year of each two-year license term. Persons initially licensed as instructors in the last six months of the two-year license term are exempt from this seminar attendance requirement for the first renewal of their instructor license.

3. In the event that any person to whom an instructor's license has been or shall have been issued shall fail to renew such license or obtain a new license for a period of two consecutive years or more after the expiration of the last license held, the Commission shall require such person to again fulfill all the qualifications for initial licensure as an instructor prior to issuance of a further instructor's license. This requirement shall not apply to a person reapplying for an instructor's license who was a licensed instructor and who allowed their license to expire due to subsequent employment in a public agency in this State with responsibility for dealing with matters relating to real estate if the person reapplying does so within one year of termination of that employment.

(m) For real estate prelicensure courses, the maximum teaching load per instructor or guest lecturer shall not exceed the ratio of one instructor or guest lecturer to 60 students per class. Each prelicensure course offered by a licensed school shall be under the supervision of an instructor licensed pursuant to 45:15-10.5 and 11:5-2.2(k). At least one licensed instructor shall be present in the classroom at all sessions. However, additional instructors or guest lecturers may be utilized for instruction so long as not more than 25 percent of the required instruction is done by guest lecturers. Broker prelicensure courses may be taught by up to three instructors, provided that one licensed instructor is designated as having the responsibility for the quality of instruction in that course. School directors shall maintain as a business record the names of any persons teaching as guest lecturers or as a group of instructors, with an indication of the designated supervising instructor.

(n) All tuition charged by a school shall be specified separately. If additional fees are to be charged for supplies, materials or books needed in course of work, they shall be itemized by the school prior to the payment of any fees and such items shall become the property of the student upon payment.

(o) The tuition and fees shall be specifically set forth in a student contract. The contract shall expressly state the school's policy regarding the return of unearned tuition when a student is dismissed or withdraws voluntarily or because of hardship.

(p) Any person who has a permanent disability or physical handicap which precludes that person from attending regular scheduled classes at a licensed school may request Commission approval to receive special instruction through a licensed school provided this request is supported by sworn statements of doctors or other persons having knowledge of the facts and provided a licensed school is willing to undertake such an agreement.

(q) No school shall, without the approval of the Commission, accept for enrollment as a transfer student any person concurrently enrolled with any other licensed school, unless upon the showing of good cause by said student to the Commission in writing.

(r) Any school that offers real estate continuing education courses shall maintain records of licensees' attendance at such courses as prescribed by 11:5-12.8. Every school shall permanently establish and maintain for each student enrolled in a prelicensure education course, complete, accurate and detailed records for a period of not less than three years after student matriculation. Such records shall be available for inspection during regular school hours by the Commission and shall contain the following information:

1. The total number of hours of instruction undertaken by the student;

2. Completed areas of study in real estate subjects prescribed by the Act and these regulations;

3. The student's attendance record; and

4. The names of all supervising instructors and guest lecturers.

(s) To satisfactorily complete any prelicensure course, a student must receive a passing grade and attend at least 80 percent of the class session hours required for the course by N.J.A.C. 11:5-2.1.

(t) Upon a student's satisfactory completion of a prelicensure course in real estate, the school shall issue to the student a Course Completion Certificate.

(u) The director of a real estate school shall be responsible for properly closing the school in compliance with this subsection.

1. No later than 10 days after the date on which the school ceases operations, the director shall return the school license, stamp, and all education certificates to the Commission and shall advise the Commission in writing of the date on which the school closed.

2. Within 30 days of the date on which the school ceases operations, the director shall submit an affidavit to the Commission certifying the following:

i. The location where student records are to be kept in compliance with (r) above and the name of the person who is to act as custodian of the records. The Commission shall be notified immediately of any change in such information. Records shall be kept for a period of not less than three years;

ii. The name of the owner or authorized representative of the school and the address where he or she may be contacted by the Commission;

iii. That the school license and school stamp have been returned to the Commission;

iv. That all students have been timely notified of the school closing, and any tuition received by the school for future courses or courses which were not completed has been returned to the students;

v. That all signs have been removed, and all advertisements and trade materials which refer to the school have been recalled;

vi. That the appropriate telephone services have been advised that the school is closed and that future telephone directories should not contain the name of the school; and

vii. That there are no outstanding fees, fines or penalties due and owing the Commission.

(v) No school shall use any name other than the name in which it is licensed for advertising or publicity purposes; nor shall any school advertise or imply that it is "recommended," "endorsed," "accredited," or "approved" by the Commission, but a licensed school may indicate that it has been "licensed" to conduct courses of education in real estate subjects to qualify applicants for licensure examination. No school shall make any warranties or guarantees that a student will pass the State license examination as a result of taking its course.

(w) (Reserved)

(x) The purpose of this subsection is to ensure that there is a total separation between instructional activity conducted by licensed schools and any solicitation of students, which, as defined at (x)2ii below, means any recruiting efforts or brokerage activity directed at students. These provisions will be construed in a manner consistent with that regulatory objective. A violation of any of these provisions will be considered by the Commission as conduct demonstrating unworthiness for licensure, thereby subjecting the offending licensee to sanctions pursuant to N.J.S.A. 45:15-17(e) and (t). The Commission may also impose sanctions for a violation of these provisions pursuant to N.J.S.A. 45:15-10.11 and N.J.A.C. 11:5-12.15. Requirements regulating the involvement of licensed schools in soliciting students to become salespersons or referral agents for particular real estate brokers are as follows:

1. At the beginning of the first class session of all salesperson or referral agent prelicensure courses, all licensed schools shall distribute to all students in writing the following:

NOTICE

TO: ALL SALESPERSON/REFERRAL AGENT COURSE STUDENTS

FROM: NEW JERSEY REAL ESTATE COMMISSION

RE: SOLICITATION OF SALESPERSON OR REFERRAL AGENT LICENSE CANDIDATES AT PRELICENSURE SCHOOLS ...

New Jersey Real Estate Commission 20 West State Street

PO Box 328

Trenton, New Jersey 08625-0328

Attn: Education Bureau

2. For the purposes of this subsection, the following definitions shall apply:

i. The phrase "brokerage activity" means any activity which, pursuant to 45:15-1 and 45:15-3 would require the person engaging in such activity to hold a license as a real estate broker, real estate salesperson or referral agent;

ii. The term "solicit" means to recruit, invite or urge a student to seek employment with a particular broker, or to list, purchase or lease through, or to make referrals of listing, purchaser or lessee prospects to a particular broker; and

iii. The phrase "successful completion" means the receipt by the student of a Real Estate Commission school certificate form, duly signed by the instructor and the school director and stamped by the licensed school, certifying to the student's having completed and passed a prelicensure course conducted by that school.

3. With the exception of posting, distributing or displaying written materials as provided in (x)5 below, no school director, instructor, guest lecturer or staff member shall, prior to, nor within seven days following, a student's successful completion of a course, solicit a student to become a salesperson or referral agent for any particular real estate broker, nor shall any such person at any time accept any fee or other compensation for soliciting or recruiting students attending their school to apply for employment with a particular real estate broker.

4. No in-person or electronic solicitation of students to apply for employment as salespersons or referral agents with a particular real estate broker shall be permitted at a licensed school location during the prescribed class hours, nor in the breaks between such class hours. Such soliciting may be scheduled and held at licensed schools before, after or separate from the prescribed class hours, for example as a "career night" for students, provided that students are notified in writing in advance that their attendance at such recruitment functions is completely voluntary. However, no school director, instructor, guest lecturer or staff member shall engage in such activity at any time prior to, nor within seven days following, a student's successful completion of a course. Licensed instructors who are also licensed brokers, salespersons or referral agents may conduct prelicensure courses, and licensees who are not licensed instructors may appear as guest lecturers in such courses, so long as their presentations do not include the solicitation of students.

5. Any licensed school which posts, distributes or displays written material which solicits students to inquire about employment as a salesperson or referral agent with a particular broker must similarly post, distribute or display comparable written material from any real estate broker who requests the school to do so. However, no written material soliciting students to apply for employment with a particular real estate broker or any referral program shall be distributed during the prescribed class hours.

6. No licensed school may offer a reduced tuition rate to students where eligibility for the lower tuition is contingent upon a student making a commitment to becoming licensed through a particular broker subsequent to their qualifying for licensure and no licensed school may otherwise make or imply any promise or guarantee of employment to any student.

7. No oral statements or written text referring to a licensed school may be included or contained in any advertisement by a real estate licensee, and no advertisement of a licensed school may refer to the brokerage operation or include the telephone number of any licensee except that a school which is owned by a real estate licensee or franchisor may use that name in its school name.

i. Any advertisement by a school whose name includes the name of an affiliated licensed real estate broker or franchisor shall include the following disclosure legend:

Attending this school will not obligate you to become employed with our affiliated real estate broker(s), nor guarantee you an interview or a job with our affiliated real estate broker(s).

ii. No advertisement referring to a licensed school may be placed in the Help Wanted classified section of any newspaper or periodical.

8. No licensed school shall conduct prelicensure course sessions in any area which is part of a location which is licensed as a main or branch office of a real estate broker. For the purposes of this paragraph, an area will be considered as part of a licensed office location if any brokerage activity is conducted in that area at any time.

i. Where space on two or more floors in a multi-story building is licensed as a main or branch office location, it is permissible for prelicensure courses to be conducted in such a building, provided that the primary means of access to and egress from the floor where the courses are conducted does not require the students to walk through any area of the licensed office location wherein brokerage activity occurs.

ii. Where only one floor in a building is licensed as a main or branch office, it is permissible for prelicensure courses to be conducted in another area on that floor, provided that there is a separate entrance to that area either from the exterior of the building or from a common foyer or lobby and provided that the primary means of access to and egress from the area wherein the courses will be conducted does not require students to walk through a portion of the licensed premises wherein brokerage activity takes place.

iii. In all situations where prelicensure courses are conducted in the same building in which brokerage activity occurs under the authority of a broker in any way affiliated with the licensed school conducting such courses, the broker shall post signs either on the exterior of the building or in any common foyer or lobby, directing students either to the separate exterior entrance to the school location or to the primary route of access to the school location from such foyer or lobby.

9. No licensed school shall allow any person to solicit students enrolled in, or considering enrolling in, a prelicensure or continuing education course to list, purchase or lease any property; or for referrals of prospective sellers, purchasers or lessees at any time while such students are on school premises.

(y) Licensed schools providing continuing education courses shall comply with all requirements imposed upon the providers of such courses as set forth in N.J.A.C. 11:5-12.

N.J. Admin. Code § 11:5-2.2

R.1972 d.127, effective 6/28/1972.
See: 4 N.J.R. 71(a).
Amended by R.1972 d.150, effective 7/27/1972.
See: 4 N.J.R. 160(d), 4 N.J.R. 190(a).
Amended by R.1980 d.441, effective 10/10/1980.
See: 12 N.J.R. 341(a), 12 N.J.R. 665(e).
(e) and (f): New text.
Amended by R.1983, d.471, effective 11/7/1983.
See: 15 N.J.R. 1343(a), 15 N.J.R. 1865(c).
Language simplified.
Amended by R.1984, d.218, effective 6/4/1984.
See: 16 N.J.R. 489(a), 16 N.J.R. 1352(a).
Section substantially amended.
Amended by R.1986 d.63, effective 3/17/1986.
See: 17 N.J.R. 376(a), 18 N.J.R. 566(b).
( o)-(p) deleted; old (q) recodified to (p) with text added "instructor(s) name and . . . after student matriculation."; (r)-(w) recodified to (q)-(v).
Amended by R.1988 d.409, effective 9/6/1988.
See: 20 N.J.R. 1161(a), 20 N.J.R. 2298(a).
Substantially amended (j) and (k); added new ( l) and recodified ( l)-(v) as (m)-(w).
Amended by R.1990 d.378, effective 8/6/1990.
See: 22 N.J.R. 777(a), 22 N.J.R. 2323(a).
Added new x.
Amended by R.1993 d.11, effective 1/4/1993.
See: 24 N.J.R. 3488(a), 25 N.J.R. 180(a).
Subsection (e) deleted and reserved.
Amended by R.1994 d.59, effective 2/7/1994 (operative July 1, 1994).
See: 25 N.J.R. 4855(a), 26 N.J.R. 801(a).
Amended by R.1994 d.267, effective 6/20/1994 (operative July 1, 1994).
See: 26 N.J.R. 730(a), 26 N.J.R. 1194(b), 26 N.J.R. 1222(a), 26 N.J.R. 2581(c).
Amended by R.1998 d.497, effective 10/5/1998.
See: 30 N.J.R. 2333(a), 30 N.J.R. 3646(a).
Changed N.J.A.C. references throughout.
Amended by R.2004 d.130, effective 4/5/2004.
See: 35 N.J.R. 4812(a), 36 N.J.R. 1780(a).
In (g)1, deleted "paragraph" following "set forth in", deleted "promptly" preceding "disclosed to" and inserted "within 10 business days" following "the Commission"; in (n), inserted "prior to the payment of any fees" following "itemized by the school".
Administrative correction.
See: 36 N.J.R. 5365(a).
Amended by R.2011 d.184, effective 7/18/2011.
See: 43 N.J.R. 369(a), 43 N.J.R. 1592(a).
In the introductory paragraph of (a), inserted "prelicensure" and "and, as applicable, to the conducting of continuing education courses by such schools and instructors pursuant to N.J.A.C. 11:5-12.1", and substituted a comma for "and" following "10.5"; in the introductory paragraph of (f), inserted "a" preceding "proper", and substituted "evidencing compliance with" for "covering" and "New Jersey Commission on" for "State Department of"; in (f)1, inserted "prelicensure" and the last sentence; in (m), substituted "For real estate prelicensure courses, the" for "The"; rewrote the introductory paragraph of (r); in (t), inserted "prelicensure" and "Course Completion"; in the introductory paragraph of (x), inserted "and N.J.A.C. 11:5-12.15" and "or referral agents"; in (x)9, deleted a comma following "person to", and inserted "or continuing education"; and added (y).
Amended by R.2012 d.006, effective 1/3/2012.
See: 43 N.J.R. 1791(a), 44 N.J.R. 86(b).
In (x)1, (x)2i, (x)3 and (x)5, inserted "or referral agent"; in the "TO" line of the NOTICE in (x)1, inserted "/REFERRAL AGENT"; in the "RE" line of the NOTICE in (x)1, inserted "OR REFERRAL AGENTS", in the introductory paragraph of the NOTICE in (x)1, substituted "their" for the fifth occurrence of "the"; in the last paragraph of the NOTICE in (x)1, inserted "/referral agents"; in (x)2i, substituted a comma for "or" following "broker" and inserted "45:" preceding "15-3"; in (x)3, inserted "or displaying"; and in (x)4, deleted "or any referral program" following "broker" and substituted a comma for "or" following "brokers".

Amended by 55 N.J.R. 302(a), effective 2/21/2023