Attorney Review Period: What New Jersey Home Buyers Need to Know

In New Jersey, a realtor and his/her client will make an offer before attorneys get involved in the process. Once an offer is accepted, the attorney review period begins. This article will focus on the attorney review from the Buyer’s perspective.

What is the attorney review period in New Jersey?

There is a standard real estate contract used by most realtors in the State of New Jersey.  

It consists of general terms and some specific information related to the transaction. (i.e. buyer and seller names, offer price, payment, proposed closing date, etc.)

When the offer is accepted by the Sellers, the signed contract goes to the attorneys. This is typically the first time an attorney has taken a look at what each party has agreed to. The attorneys have 72 hours to initiate attorney review.

Over the course of the attorney review period, the parties, through their attorneys will work to make any necessary modifications to the signed contract.

During this period, each party is not bound to one another. This means that the home can still be up for sale until this process is complete and the transaction can be cancelled at any time.

What happens if you do not initiate attorney review in New Jersey?

If both parties only sign the contract and do not initiate attorney review during the 72-hour period, then the contract will become legally binding as it was originally drafted.

What to expect during the attorney review period?

1. Correcting clerical errors. Minor errors will be amended during the period. For instance, a buyer may have gone by a nickname in the contract instead of his/her legal name. Or, the math for the purchase doesn’t add up and will need to be re-calculated.

2. Ensuring the Buyers understands what they have agreed to. When a buyer submits the offer, the objective is to get it accepted, especially in cases such as bidding wars or properties in high demand. The buyer’s will often include incentives for the seller to accept an offer, which the buyer may not fully understand. For instance, sometimes the appraisal will be waived, which prevents the buyer from getting a mortgage, or certain parts of the home inspection may be waived without the buyer fully understanding what they agreed to.

   The attorney review period is a time for the buyer to have these conversations with an attorney to fully understand their legal obligations. If they discover they no longer want to agree to the terms originally signed upon, the attorney can make the necessary changes to meet the buyer’s expectations.

3. There are several standard changes that the buyer’s attorney will make. For instance, the buyer’s attorney will ordinarily relax some of the strict deadlines. Those deadlines include dates to deliver deposits, home inspection dates, mortgage commitment dates, and so forth.

   In a real estate transaction, many moving parts are not in the buyer's control. The buyer does not want to find themselves in breach of a legally binding contract because something took longer than anticipated. It is the attorneys job to protect the Buyers from these types of occurrences.

What happens after the attorney review period?

Once the attorney review period is completed, the house is officially Under Contract. Typically, the next step is the home inspection.  

Are you in need of an experienced attorney in New Jersey to help guide you through this process? To schedule your free consultation, please call the Adam M. Brown Law Group. We are looking forward to helping you get through the real estate process with ease.

CAN A NJ BUSINESS REPRESENT ITSELF IN COURT?

As an attorney, I would rarely recommend a business, whether it is a sole proprietorship, corporation, or limited liability company (LLC) represent itself in a legal dispute. It is vital that you speak with a Summit business law attorney for legal advice regarding your business’ specific situation. However, the information presented below is helpful for general consideration.

In my experience, when a business is in the middle of a multi-million dollar dispute, they will spare no expense in pursuing or defending the claim. These types of claims tend to be atypical.

Far more common are smaller disputes in the four to five figure range where the business does not believe it is economical to retain counsel.

With few exceptions, unless the business is a sole proprietorship, the State of New Jersey REQUIRES a business to be represented in court by an attorney.

NJ Court Rule 1:21-1(c) prohibits, a business entity other than a sole propriety from appearing or filing any paper “…in any action in any court of this State except through an attorney authorized to practice law in this State.” Therefore, corporations must be represented in court by counsel. See Globe Media Grp., LLC v. Cisneros, 403 N.J. Super. 574, 577 (App. Div. 2008); Olympic Indus. Park v. P.L., Inc., 208 N.J. Super. 577, 580-81 (App. Div.), certif. denied, 104 N.J. 453, 517 (1986). Rule 1:21(c) extends to all legal proceedings and, as such, requires corporations to be represented by counsel at mediations as well.

The most common exception is a small claims action. NJ Court Rule 6:11 provides that “any authorized officer or employee may prosecute and defend on behalf of a party which is a business entity, whether formally incorporated or not...” In other words, generally speaking, a business can represent itself in a small claims matter. (under $3,000.00)

These rules should not be taken lightly.  In my experience, businesses will frequently attempt to file a Complaint or Answer pro se (Pro se is a Latin term that means “on one’s own behalf.”) only to have it rejected by the courts. A rejected Answer can become especially problematic for a business because there are deadlines to respond to a Complaint. It is not uncommon that by the time the business learns the court rejected its Answer, the time to respond has expired. Now the business is in default and susceptible to a judgment.

Contact the Adam Brown Law Group, LLC for an initial consultation about how to your legal issue. Call us to request yours at (908) 379-9731 or send us a message through our secure contact form.

How to Classify Your NJ Employees and Independent Contractors the Right Way

Workers in New Jersey are classified as “employees” or “independent contractors.” Businesses can use the “ABC Test” to make a legal distinction between the two roles.

As New Jersey lawmakers continue to crack down on local business owners, the penalties recently increased after Governor Murphy signed a series of bills in January of 2020 that raise the stakes for companies that do not comply.

If you have specific legal questions about how to classify your employers, you should discuss your situation with a Summit business law attorney. He or she will provide you with personalized legal advice that makes sense for your business.

The Impact of Misclassifying New Jersey Employees

It is no secret that you have a legal obligation as a small business owner to classify workers in compliance with New Jersey employment laws. However, the problem is still rampant across the state. The most widely affected industries include trucking, transportation, construction, janitorial, and home care.

Federal and state audits indicate that up to 30 percent of businesses misclassify at least one or more employees as independent contractors. The reality is that many well-meaning business owners do not realize they are making an error.

Misclassification can manifest in several forms, including:

•  Classifying employees as independent contracts who do not operate as their own business

•   Requiring employees to form a limited liability corporation (LLC) or other business entity to “get the job”

•   Paying employees “off the books” while not providing workers’ compensation coverage or other benefits

The misclassification of workers severely impacts the rights of employees and the well-being of the economy. Business owners who dodge these rules prevent misclassified workers from receiving the work benefits and protections they deserve. Plus, they side-step the requirement to pay into social welfare programs, like social security and Medicare.

Use the “ABC Test” to Lawfully Classify New Jersey Employees

In New Jersey, workers are classified as employees or independent contractors. Only issuing your workers a 1099 IRS form does not mean that you are classifying them legally.

New Jersey adopted a test that you can use to determine an individual’s or position’s employment status under these guidelines. It is a test that broadly defines worker classification known as the “ABC Test.”

The ABC Test provides a subjective, three-prong outline that you can use to determine if the individual is lawfully classified as a contractor:

A.     The individual is free from managerial direction to perform the services for which he or she is hired under contract, and;

B.     The services the contractor provides is outside the typical course of business for which the organization offers, and;

C.     The individual is engaged in routinely providing these serves as an independently established business entity or profession

As you can see, the guidelines of independent contractor classification are precise. If you notice that you might be violating the conditions of this test, then you can respond by changing how you use contractors or hire them directly.

For additional help with classifying workers, you can use this Worker Classification Questionnaire form provided by the NJ Department of Labor & Workforce Development (DOL) to assist you.

If you are in doubt, you can deploy the services of a Summit business law attorney to provide counsel as to how you can address the worker classification issue. Doing so is a “fail-safe” when it comes to providing yourself with the legal reassurance you need. Otherwise, you could be accidentally violating the law and face stiff penalties if caught.

There Are Penalties for NJ Employee Misclassifications

On January 21, 2020, Governor Murphy signed in a series of bills that up the ante when it comes to penalizing businesses for misclassifying New Jersey workers. Therefore, it is wise for employers to address this issue now rather than leave themselves exposed to employee misclassification claims.

Below, you can find a short description of penalties that delinquent employers face:

·   Stop-work orders: The DOL now has the authorization to shut down businesses if it believes that the company is engaging in any wage, benefits, or tax violations with as little as seven days’ notice. Stop-work order violations are subject to fines of up to $5,000 per day.

·   Additional fines: If you are caught misclassifying independent contractors, you are subject to a first-time violation of $250 with up to an additional $1,000 per subsequent occurrence. You might also have to pay as much as five percent of the worker’s gross earnings.

·   Back-owed wages: New laws also mean that the misclassified worker can file a claim for unpaid wages or taxes owed due to the misclassification. The bill exposes individual owners, officers, directors, and managers to this liability as well.

·   Public exposure: It is now legal for the DOL to share the names of businesses on its website that violating the state’s wage, benefit, or tax laws. It also prevents your company from contracting with public entities until the violation is corrected.

Ultimately, the costs associated with employee and independent contractor misclassifications are steep. As a general guideline, it is better to avoid any violations altogether by reaching out to a Summit business law attorney for specific legal questions regarding New Jersey employment laws.

Contact a Trusted Summit Business Law Attorney for Specific Legal Advice

Defining the lines between employees and independent contractors is challenging for some businesses and industries. Rather than leave things to chance, you will find that speaking with a Summit business law attorney at The Adam Brown Law Group LLC about your business is helpful.

I have the requisite experience and knowledge to guide your company in the right direction when determining how to classify your employees and independent contractors in New Jersey. You can contact my office to ensure you are compliant by calling (908) 379-9731. You can also send my office a confidential message through this contact form.