The NJ Attorney Review Period: What Every Buyer and Seller Needs to Know
Most people think that signing a real estate contract in New Jersey means the deal is binding. It is not. Under New Jersey law, every residential real estate contract includes a built-in protection called the Attorney Review Period, and until it concludes, neither party is legally bound to the agreement.
What Is the Attorney Review Period?
After a buyer and seller sign a real estate contract in New Jersey, each party has three business days to begin to have the contract reviewed by their attorney. During this window, the attorney can take one of three actions:
Approve the contract as written.
Disapprove and propose modifications to specific terms.
Terminate the contract entirely.
If an attorney terminates the contract, either party can walk away without penalty. If modifications are proposed, the parties negotiate until they reach an agreement or the contract is cancelled. If the three-business-day window closes without disapproval, the contract becomes legally binding.
It is important to understand what counts as a business day. Saturdays, Sundays, and legal holidays do not count. The clock also does not start until both parties have received a fully signed contract.
Why Does Attorney Review Matter?
The Attorney Review Period exists to protect buyers and sellers from being locked into a contract they do not fully understand. Real estate contracts in New Jersey are typically drafted by the Buyer’s agent using a standard form. While these forms cover the basics, they do not always account for the specific circumstances of every transaction.
During attorney review, a real estate attorney can identify clauses that may not be in your best interest, negotiate terms related to deposit amounts, inspection contingencies, and closing dates, address issues that the standard contract form does not adequately cover, and ensure that you understand every obligation you are agreeing to before you are legally bound.
What Buyers Should Know
If you are a buyer, the Attorney Review Period is your opportunity to review the contract in detail before you are committed. Common issues that arise during buyer's attorney review include unclear language about what personal property is included in the sale, deposit terms that may not give you adequate protection if the deal falls through, inspection contingency language that is too narrow, and financing contingency clauses that may not give you enough time to secure your mortgage.
Your attorney does not need to find a problem to make the review worthwhile. Even a clean contract benefits from a professional review to confirm that your interests are protected.
What Sellers Should Know
If you are a seller, the Attorney Review Period gives you the same protection. Your attorney can review the buyer's financial qualifications, ensure that contingency deadlines are realistic given your closing timeline, and address any proposed modifications from the buyer's attorney before you are bound. This is why having representation from the moment a contract is signed, not days later, is so important.
Common Mistakes During Attorney Review
The most common mistake buyers and sellers make is assuming that attorney review is a formality. Some people hire an attorney after the three-day window has already closed, which means they have lost their most important window for negotiation. Others hire an attorney who is not experienced with New Jersey real estate, which can result in missed issues or delays.
How Petriello Law Handles Attorney Review
At Petriello Law, we begin reviewing every contract the day the Contract is received. Our goal is to ensure that your interests are fully protected before you are legally committed to the transaction. We have successfully closed thousands of transactions in Passaic County and Northern New Jersey since 1990, and we know what to look for.
Not sure what seller disclosure obligations go along with your transaction? Read our full guide to NJ Seller Disclosure Requirements. If you want to know what to look for in a NJ real estate attorney, read this guide on how to choose one.
If you are about to sign a real estate contract, or if you are in the middle of attorney review right now, call us before the window closes. Petriello Law · Mpetriello@PetrielloLaw.com; 973-890-7262 · 30 Galesi Drive, Suite 101, Wayne, NJ 07470 · Free initial consultation.
External resource: For background on New Jersey court rules related to attorney review, see njcourts.gov. For consumer protection information related to real estate transactions in NJ, see the NJ Division of Consumer Affairs.