n New Jersey, when a real estate broker prepared contract is signed by a Buyer and Seller, the parties have the right to consult with an attorney who may then disapprove the contract for any reason at all. This right to terminate the contract for any reason is available to both parties to the contract so long as it is exercised within three (3) business days of the parties’ receipt of fully executed or signed contracts.
This “attorney review period” was created by the New Jersey Supreme Court and is applicable to contracts prepared by licensed real estate brokers and sales people for residential real estate containing one to four dwelling units and for the sale of vacant one-family lots in sales which provide the realtor with a commission or other fee interest. The attorney review provisions also apply to documents prepared by a real estate broker or sales person which materially modify the original contract.
During this initial three (3) day period, if neither party exercises their right to have an attorney review the contract, the contract will be binding. Likewise, if both party retains a lawyer, and that lawyer does not disapprove the contract within that same three (3) day period, the contract becomes binding. The review period may be extended by mutual agreement of the parties.
Once an attorney “disapproves” the contract during the attorney review period, the contract is terminated and, it will remain terminated until the parties, through their attorneys agree to any proposed changes. As soon as the parties agree to the changes, the contract becomes binding subject to the agreed upon changes. This negotiation process may exceed the initial three (3) day review period. If a contract is terminated during the attorney review and the parties cannot agree on proposed changes, the Buyer would be entitled to the full return of any deposits.