What is the Three Day Attorney Review Clause in New Jersey for residential real estate transactions?
If you are currently buying or selling your home or a residential property, understanding your rights and options is extremely important.
The standard attorney review clause as approved by the New Jersey Supreme Court is as follows:
1. Study by Attorney
The Buyer or the Seller may choose to have an attorney study this contract. If an attorney is consulted, the attorney must complete his or her review of the contract within a three-day period. This contract will be legally binding at the end of this three-day period unless an attorney for the Buyer or the Seller reviews and disapproves of the contract.
2. Counting the Time
You count the three days from the date of delivery of the signed contract to the Buyer and the Seller, You do not count Saturdays, Sundays or legal holidays. The Buyer and the Seller may agree in writing to extend the three-day period for attorney review.
3. Notice of Disapproval
If an attorney for the Buyer or the Seller reviews and disapproves of this contract, the attorney must notify the REALTOR(S) and the other party named in this contract within the three-day period. Otherwise, this contract will be legally binding as written. The attorney must send the notice of disapproval to the REALTOR(S) by certified mail, by telegram, or by delivering it personally. The telegram or certified letter will be effective upon sending. The personal deliver will be effective upon delivery to the REALTOR(S) office. The attorney may also, but need not, inform the REALTOR(S) of any suggested revision(s) in the contract that would make it satisfactory.
The requirements for the attorney review are also set forth in the New Jersey Administrative Code 11:5-6.2, entitled Counting Time and Options Under the Attorney Review Clause.
All realtor prepared contracts must contain a three-day attorney review period. Under this clause, the Buyer or Seller may choose to have an attorney review their contract. The contract will be legally binding at the expiration of the three-day period unless an attorney for either party reviews and disapproves of the terms of the contract.
In terms of counting time or calculating the expiration of the three-day attorney review period, you do not count the date of delivery of the fully executed agreement to all parties and you do not count Saturdays, Sundays or legal holidays.
If an attorney for the Buyer or the Seller reviews and disapproves of the terms of the contract, the attorney must notify the realtors and the other party named in the contract within the three-day time period, otherwise, the contract will become legally binding as written. The notice of disapproval must be sent by certified mail, by telegram or by delivering it personally. The telegram or certified letter is effective upon the date that the telegram or letter was sent. Personal delivery is, of course, effective upon the date of the deliver to the realtor’s office. If the attorney disapproves of the contract, the contract becomes null and void and the parties have no further obligation to each other with regard to the sale or purchase of the property. In the alternative, the attorney may inform the realtor of suggested changes to the contract that will make the contract satisfactory and the contract will become binding only if the other party agrees to the suggested changes.
Please note that the attorney review clause is only applicable to real estate broker prepared contracts and is not applicable and does not have to be included in the contract that is prepared by an attorney.
Are you in the process of buying or selling a property?
Here is what’s included in our 3 day attorney review:
1. Initial call with client to discuss questions related to the real estate contract.
2. Initial attorney review of the contract.
3. Notes and comments to client regarding the contract review.
4. Includes up to 2 additional reviews of changes that were made to the contract.
5. Final Review of completed contract.
All contract review work will be completed within 1 business day.
If it is agreed with the client that the deal does not make sense to move forward and close, attorney will write a letter cancelling contract.
Note: The review fee charged does not include attending any meetings or closings, nor does it constitute any additional attorney client relationship outside the scope of the 3 day real estate contract review.