Cancel you cancel a real estate contract in New Jersey?
Real estate contracts for 1-2 family properties prepared by brokers may be canceled during the three business-day attorney review in New Jersey. New Jersey law requires broker-prepared residential contracts to include an attorney review clause that allows either party’s attorney to disapprove the contract for any reason before it becomes binding. The party cancelling must have an attorney send a timely notice of disapproval to the other party within the three-day review window.
This post is for New Jersey buyers and sellers in residential real estate deals who need to cancel a contract because of a mistake, a change of heart, or an unexpected issue that arose after signing. Failing to cancel during attorney review can mean you’re legally bound to perform on a contract you no longer desire.
Call (201) 627-2457 or visit the Contact Us page today for help with your attorney review. We’re here to help.
Can you cancel a real estate contract in New Jersey?
Yes, you can cancel a real estate contract during the attorney review process in New Jersey.
The three business-day attorney review period is built into broker-prepared residential contracts. During this window, either side’s attorney can disapprove the contract for any reason. This disapproval stops the contract from becoming binding. If no attorney sends a timely disapproval, the contract generally becomes enforceable at the end of the period.
he New Jersey Supreme Court approved the framework that allows licensed real estate professionals to use standardized form contracts, so long as those contracts include a prominent attorney review clause. See New Jersey State Bar Ass’n v. New Jersey Ass’n of Realtor Boards, 93 N.J. 470 (1983). Cancellation rights are also reflected in New Jersey’s real estate commission regulations. See N.J.A.C. 11:5-6.2.
“Attorney review” is not a do-it-yourself right. A New Jersey attorney must be retained to cancel the contract.
How to Cancel a Real Estate Contract in New Jersey During Attorney Review
Step 1 – Contact an Attorney As Soon as Possible
Reach out to a New Jersey real estate attorney immediately because the attorney review period lasts only three business days. This period can end fast if the parties hesitate or are uncertain.
You can find an attorney through a referral from friends or family, real estate agent for recommendations, or an online search. Connect with counsel quickly so the attorney can confirm the deadline, review the contract, and be ready to send a timely notice of disapproval if that’s the right move.
Step 2 – Hire an Attorney
Hire an attorney who routinely handles residential transactions and attorney review letters.
Look for a lawyer who does three things well: (i) regularly works on New Jersey attorney reviews; (ii) can quickly prepare a notice of disapproval; and (iii) has the means to delivery via e-mail and certified shipping.
How much does it typically cost in attorney fees to disapprove a contract?
Attorneys typically handle a contract disapproval during attorney review for a modest flat fee. Drafting and delivering a notice of disapproval is limited-scope engagement normally not hourly or exorbitant in cost.
Step 3 – Attorney Reviews the Contract
The attorney’s first priority in reviewing the contract is to confirm you signed a broker-prepared residential form contract that includes the required attorney review clause, and to verify you are still within the three-business-day attorney review period.
The ability to disapprove depends on acting before the review window expires.
This is also a good time to decide whether you truly move on from the transaction or prefer for the sale to move forward by disapproving and then proposing changes. Common additions include an inspection contingency (with repair or credit provisions), a mortgage/financing contingency, an appraisal contingency, or stronger title and closing-timeline protections.
Step 4 – Attorney Prepared Notice of Disapproval
A proper disapproval letter should be unambiguous.
Disapproval letters should do the following:
- Identify the contract
- Identity the property
- State that counsel disapproves within the attorney review period
- Specify the next action. Contracts are either disapproved permanently and there are no further negotiations, or also propose changes if accepted will reinstate the contract.
You may hear the phrase “termination” of the contract in this context. During attorney review, the cleaner framing is “disapproval” because it matches the language attorney review clause.
Here is sample language you may see:
Please accept this correspondence as the Buyer’s formal notice, during the three-business-day attorney review period, that the undersigned, as attorney for [Buyer Name(s)], hereby disapproves the Purchase and Sale Agreement for [Property Address, City, NJ ZIP] between [Buyer Name(s)] and [Seller Name(s)], which was fully executed on [Date of Final Signature/Delivery to Parties].
Step 5 – Attorney Delivers a Notice of Disapproval
Traditionally, attorney review notices were sent by paper mail, but times have changed.
New Jersey courts recognized email delivery of an attorney review disapproval is effective. In Conley v. Guerrero, the New Jersey Supreme Court held that the attorney review notice requirements must be interpreted in a practical, modern manner, confirming that delivery by email, fax, or overnight mail satisfies the notice requirement so long as it is transmitted within the review window and clearly communicates the attorney’s disapproval of the contract (Conley v. Guerrero, 228 N.J. 339, 355–58, 157 A.3d 416 (2017)).
However, if the goal is simply to disapprove and cancel the contract outright, sending the notice by paper mail can still be a smart strategy to avoid disputes about receipt or timing.
The safest practice is to use the mailing address for the party listed in the contract. If no address appears, an attorney may look to tax records, contact the seller directly via phone, or use other reliable sources.
Notices may also be delivered to the agents, but this does not replace the obligation to give notice directly to the buyer or seller. When the other party is represented by counsel, delivery may be made directly to the attorney, and in modern practice, especially when negotiations are ongoing, email delivery between attorneys is widely accepted.
Frequently Asked Questions
Can a buyer cancel a real estate contract?
Yes, a buyer can cancel during attorney review, through counsel. Many buyers ask how to cancel a house contract after their offer is accepted. In New Jersey, the best answer depends on where you are in the timeline. During attorney review, your attorney can disapprove promptly. After attorney review, you usually need a contract-based justification, like a contingency, or a negotiated release.
Can a seller cancel a real estate contract?
Yes, a seller can cancel during attorney review, through counsel. The clause runs both ways. A seller’s attorney may disapprove for any reason within the window. Buyers often ask, can a seller cancel a real estate contract if a better offer is made. During attorney review, the seller can often exit, but the seller still must give timely notice in the proper manner.
Is there a penalty to canceling during attorney review?
There is no penalty for canceling during the attorney review process. If your attorney disapproves within the deadline, you typically avoid breach damages because the contract never becomes binding as written. The real risk is missing the deadline or in effective delivery.
Contact the Law Firm of Earl P. White
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