PSI New Jersey Real Estate State Practice Exam

A broker who charges or collects an advance fee in excess of $25 for services to be rendered MUST:

1. Provide a detailed accounting of the fees within ninety days

2. Obtain written permission from the client prior to charging

3. Refund any fees if the services are not completed

4. Disclose all fees in a contract signed by the client

The correct answer is: Provide a detailed accounting of the fees within ninety days

The requirement for a broker who charges or collects an advance fee in excess of $25 to provide a detailed accounting of the fees within ninety days emphasizes accountability and transparency in real estate transactions. This rule is in place to protect clients by ensuring that they are fully informed about how their money is being used and to verify that the services they paid for are being rendered appropriately. By mandating a clear and detailed accounting, clients can see exactly what they are being charged for and can hold the broker responsible if the promised services are not delivered. This practice not only fosters trust between the broker and the client but also helps prevent potential disputes regarding the use of advance fees. Other options, while important in different contexts, don't address the same requirement. For instance, obtaining written permission from the client prior to charging could be necessary in some scenarios, but it does not provide the ongoing transparency needed after the fee is charged. Similarly, the obligation to refund fees if services are not completed is important for consumer protection, yet ensuring proper accounting within a set time frame is a foundational measure that supports overall accountability in business practices. Lastly, disclosing all fees in a signed contract enhances transparency but again does not specifically address the requirement for detailed accounting of fees post-collection.