By: Zach Beamus
New York City’s residential brokers are breathing a sigh of relief.
For now.
But in three months that respite will end, and a severe New York State rule will go into effect that keeps them from charging renters a hefty commission when renting them an apartment on behalf of a landlord.
Attorney General Letitia James has requested an adjournment for the court case concerning the rule until this coming, as per a note that her team filed Friday in state Supreme Court.
“The Real Estate Board of New York interpreted the AG’s letter as a sign that her office needed more time to grapple with the case’s legal issues,” reported Crain’s New York Business. “Attorneys for the government and the industry recognize the complexity of the issues raised in the matter and agree that additional time is necessary for preparation of court documents,” REBNY President James Whelan said in a statement provided to Crain’s.”
On March 6, James Whelan, President, The Real Estate Board of New York, released this statement regarding the issue: “Today, the New York State Attorney General’s Office, along with attorneys for REBNY, a number of our members, and the New York State Association of Realtors (NYSAR), agreed to an adjournment in the lawsuit filed last month in Albany County Supreme Court. The Attorney General’s Office submitted a letter requesting an extension of the dates in the litigation. Attorneys for the government and the industry recognize the complexity of the issues raised in the matter and agree that additional time is necessary for preparation of court documents.”
For its part, the New York State Association of REALTORS had this to say on its web site last month: “On Monday, February 10, 2020, the Supreme Court, Albany County, issued a Temporary Restraining Order (TRO) prohibiting the Department of State from pursuing any disciplinary action against a brokerage acting as a landlord’s agent and collecting their commission directly from the tenant. The DOS is required to submit their paperwork to the court by March 13, 2020. The TRO is a direct result of legal action taken by NYSAR and REBNY against a Department of State (DOS) guidance document published on February 4, 2020 clarifying what activities a broker, and its associated licensees, may be disciplined for under the Tenant Protection Act (TPA).
“In the guidance document,” the association continued, “the DOS stated that a brokerage acting as landlord’s agent is prohibited from collecting a commission directly from the tenant as that would be a violation of the TPA. This would have had a significant impact on the custom and practice of residential rentals throughout New York. Until such time as the court rules otherwise, a broker representing a landlord as a landlord’s agent may continue to collect commissions directly from the tenant without fear of discipline by the DOS. NYSAR will notify all members through email if there are any changes to the TRO.”
