The amendments to the Consumer Fraud Act made in 1999 continue to provide REALTORS^® with certain protection when they act in good faith in the communication of information that turns out to be false. The Act states there shall be no right of recovery of punitive damages, attorney fees or both under the Act for false, misleading or deceptive information conveyed to a buyer, which had been provided to a real estate licensee by or on behalf of the seller. This applies when the real estate licensee:

• Had no actual knowledge the information was false, misleading or deceptive
• Made a reasonable and diligent inquiry to ascertain if the information is false

Obtaining a property condition disclosure statement from the seller that meets these four conditions can prove “reasonable and diligent inquiry”:

• The disclosure statement must be in the form adopted by the New Jersey Division of Consumer Affairs in May 2004.

• The statement must be obtained from the seller.

• The licensee must inform the buyer that the seller is the source of the information.

• Prior to making that communication to the buyer, the licensee must have inspected the property with reasonable diligence to ascertain the accuracy of the information in the statement.

Licensees are still obligated under the Real Estate Commission regulation, N.J.A.C. 11:5-6.4 (b), to make a reasonable effort to ascertain all material information concerning the physical condition of every property, which includes inquiries to the seller or seller’s agent about any physical conditions that may affect the property; and a visual inspection of the property to determine if there are any observable physical conditions affecting the property.