Bill > S4252

Introduced Session

This bill makes unlawful and deceptive service agreements if any part of the service subject to the agreement is not to be performed within one year after the time it is entered into and if the service agreement: (1) purports to run with the land or to be binding on future owners of interests in the real property; (2) allows for assignment of the right to provide services without notice to and consent of the owner of residential real estate; or (3) purports to create a lien, encumbrance, or other real property security interest. "Service agreement" is defined in the bill to mean a contract under which a person agrees to provide services in connection with the maintenance of or purchase or sale of residential real estate. In the bill, no person is to record or cause to be recorded an unlawful service agreement or notice or memorandum thereof in New Jersey. To record or cause to be recorded an unlawful service agreement or notice of memorandum shall be a Class A misdemeanor. A county recording officer may also refuse to accept for recordation an unlawful service agreement. If an unlawful service agreement is recorded in the New Jersey, it is not provide actual or constructive notice against an otherwise bona find purchaser or creditor. If an unlawful service agreement or a notice or memorandum thereof is recorded in New Jersey, any person with an interest in the real property that is the subject of that agreement may: (1) file a complaint with any court of competent jurisdiction in the county where the recording exists to enter a court order declaring the agreement unenforceable; and (2) recover actual damages, costs, and attorney's fees as may be proven against the service provider who recorded the agreement. The bill has several exemptions from its provisions. This includes a home warranty or similar item for maintenance of a major component, such as plumbing and HVAC; a maintenance or repair agreement entered by a homeowners' association in a common interest community; and a mortgage loan or a commitment to make or receive a mortgage loan. The bill is also not to impair the rights granted by a mechanics lien. The bill is intended to prohibit service agreements that are unlawful to an owner or a future owner of residential real estate. The prohibition is also intended to keep public records free from these agreements and subsequently, burdening future owners of real estate by getting the agreement removed from a chain of title. If a burden exists, remedies are presented through the bill, which also deter any drafting or subsequent recording of these service agreements.

Committee Categories

Troy Singleton (D)*, 

Introduced in the Senate, Referred to Senate Commerce Committee (on 03/03/2025)

Official Document