PSI New Jersey Real Estate State Practice Exam

What should listing agents ensure regarding a commercial property’s compliance with laws?

1. Local federal compliance only

2. No compliance is needed

3. All urban development laws

4. Compliance with state and local regulations

The correct answer is: Compliance with state and local regulations

Listing agents must ensure that a commercial property complies with state and local regulations, as these laws set the framework for property use, safety standards, environmental impact, and zoning requirements. Compliance is crucial because it protects the agent and the client from potential legal issues and liabilities that could arise from non-compliance, such as fines or forced property modifications. State regulations often include specific codes related to construction, occupancy, and business operations, while local regulations may govern zoning, land use, building permits, and health and safety codes. By ensuring compliance with both layers of governance, listing agents can provide their clients with valuable guidance and help promote a smooth transaction process. The other options fail to encompass the full scope of legal compliance necessary for commercial properties. For instance, focusing solely on federal compliance, ignoring local and state requirements, does not provide comprehensive coverage of what is legally required. Neglecting compliance entirely undermines the legal responsibilities that agents have in professional practice. Not recognizing the importance of all urban development laws also overlooks significant regulations that may apply in specific contexts.