25:1-16. Commissions of real estate broker and business broker, writing required

7. Commissions of Real Estate Broker and Business Broker, Writing Required. a. As used in this section:

"Business broker" means a person who negotiates the purchase or sale of a business.

"Negotiates" includes identifies, provides information concerning, or procures an introduction to prospective parties, or assists in the negotiation or consummation of the transaction.

"Purchase or sale of a business" includes the purchase or sale of good will or of the majority of the voting interest in a corporation, and of a major part of inventory or fixtures not in the ordinary course of the transferor's business.

"Real estate broker" means a licensed real estate broker or other person performing the services of a real estate agent or broker.

"Transfer or sale" means the transfer of an interest in real estate or the purchase or sale of a business.

b. Except as provided in subsection d. of this section, a real estate broker who acts as agent or broker on behalf of a principal for the transfer of an interest in real estate, including lease interests for less than three years, is entitled to a commission only if before or after the transfer the authority of the broker is given or recognized in a writing signed by the principal or the principal's authorized agent, and the writing states either the amount or the rate of commission. For the purposes of this subsection, the interest of a mortgagee or lienor is not an interest in real estate.

c. Except as provided in subsection d. of this section, a business broker is entitled to a commission only if before or after the sale of the business, the authority of the broker is expressed or recognized in a writing signed by the seller or buyer or authorized agent, and the writing states either the amount or the rate of commission.

d. A broker who acts pursuant to an oral agreement is entitled to a commission only if:

(1) within five days after making the oral agreement and before the transfer or sale, the broker serves the principal with a written notice which states that its terms are those of the prior oral agreement including the rate or amount of commission to be paid; and

(2) before the principal serves the broker with a written rejection of the oral agreement, the broker either effects the transfer or sale, or, in good faith, enters negotiations with a prospective party who later effects the transfer or sale.

e. The notices provided for in this section shall be served either personally, or by registered or certified mail, at the last known address of the person to be served.

Source: R.S.25:1-9.

L.1995,c.360,s.7.