In New Jersey, the standard residential real estate contract includes a 3-business-day attorney review period during which either the buyer’s or seller’s attorney can review the contract, request modifications, or cancel the deal entirely — for any reason and without penalty. This right is unique to NJ and a few other states, and it provides a critical safety net for both buyers and sellers. Understanding how attorney review works is essential for anyone involved in a NJ real estate transaction.
How Attorney Review Works
The attorney review clause is a standard provision in the NJ residential real estate contract approved by the NJ Association of Realtors and the NJ State Bar Association. After both parties sign the contract, a 3-business-day attorney review period begins. During this period, either party’s attorney may send a letter disapproving the contract (canceling it outright), send a letter proposing modifications to the contract terms, or take no action (in which case the contract proceeds as written). Business days exclude Saturdays, Sundays, and legal holidays. The review period begins when the last party signs the contract and it is delivered to both parties.
The Right to Disapprove
The most important aspect of attorney review is the right to disapprove the contract. During the 3-business-day period, either party’s attorney can disapprove the contract for any reason — or for no stated reason at all. The disapproval must be in writing and sent to the other party’s attorney or, if the other party is not represented, to the real estate agent. If the contract is disapproved, it is void from inception. The buyer’s deposit is returned, and neither party has any further obligation under the contract. This provides a true “out” for either party who has second thoughts or whose attorney identifies problematic terms.
Requesting Modifications
Rather than disapproving the contract entirely, an attorney may send a modification letter proposing changes to the contract terms. Common modifications include adding or adjusting inspection contingencies, modifying the closing date, adding a mortgage contingency with specific terms, addressing title issues or property condition concerns, adjusting responsibility for repairs, and adding provisions regarding inclusions and exclusions. When one attorney sends modifications, the other party’s attorney has the opportunity to accept, reject, or counter-propose. This negotiation can extend beyond the initial 3-business-day period as the parties work to reach agreement on modified terms.
What Changes Can Be Made
During attorney review, virtually any term of the contract can be modified. Attorneys commonly address the purchase price (though this is less common since it was already negotiated), contingencies (inspection, financing, appraisal, sale of existing home), closing timeline and date, allocation of closing costs, property condition requirements and repair obligations, title requirements and what constitutes marketable title, and provisions regarding tenants, leases, or occupancy after closing. The flexibility of attorney review is one of its greatest advantages — it allows legal professionals to customize the contract to the specific needs of each transaction.
What Happens After Attorney Review
If neither attorney disapproves or proposes modifications within the 3-business-day period, the contract becomes binding as written. If modifications were proposed and both parties agree to the changes, the modified contract becomes binding when both parties accept the final terms (typically confirmed in a letter or email). If modifications are proposed but the parties cannot agree, either attorney can disapprove the contract during the negotiation period. Once attorney review concludes with a binding contract, the transaction moves forward to the next phases: inspections, mortgage application, title search, and ultimately closing.
Why You Need an Attorney for Attorney Review
While NJ law does not require you to have an attorney for a real estate transaction, proceeding without one during attorney review means you lose the protections this period provides. Without an attorney, the 3-business-day period passes and the contract becomes binding without professional legal review. An attorney ensures the contract terms protect your interests, identifies potential issues before they become problems, negotiates modifications that could save you thousands of dollars, and provides guidance throughout the transaction from contract to closing.
Call Friscia & Associates Today
Whether you are buying or selling a home in New Jersey, having an experienced real estate attorney review your contract is essential. Call Friscia & Associates at (973) 500-8024 to have a NJ real estate attorney handle your attorney review and protect your interests throughout the transaction.
Legal Disclaimer: The information on this page is for general informational purposes only and does not constitute legal advice. No attorney-client relationship is formed by reading this content. Every real estate transaction is different. If you need legal advice, please contact our office to schedule a consultation.