In contravention of a long-standing New Jersey rule, the Appellate Division recently allowed a plaintiff, who was not a licensed real estate broker, to sue for a commission based on an oral agreement. Sammarone v. Bovino, 395 N.J. Super. 132 (App. Div. 2007). Not only is this case a significant change to prior settled law, it adds additional risk for all sophisticated real estate purchasers of commercial property in New Jersey.
The Real Estate Brokers and Salesman Act, N.J.S.A. 45:15-1 to 29.5, provides that no person may engage in real estate sales or broker activity without being a licensed sales agent or a real estate broker. Additionally, the statute specifically provides that no person may bring an action in the New Jersey courts for the collection of compensation for performing real estate sales or brokerage acts unless that person was a duly licensed real estate broker at the time of the alleged cause of action. Until this case, our courts have consistently broadly interpreted the statute and have denied claims by people seeking commissions on real estate transactions, unless they were licensed at the time the action arose.
