New York officially gives the green light to real estate agents to collect brokerage fees

photo by Daryan shamkhali to Unsplash

New York State this week rescinded the brokerage fee ban, which was never really a ban. Last year, the State Department issued guidelines for sweeping rent reform laws of 2019 that would not allow brokers hired by landlords to charge fees to potential tenants. Following several court challenges, a judge ruled last month that a ban on brokerage fees was a “error of lawAnd struck down the law. The state officially updated on Tuesday orientation comply with the court decision.

In 2019, Governor Andrew Cuomo enacted the Housing Stability and Tenant Protection Act, which extends tenant protection, prevents landlords from deregulating rent-stabilized apartments, and caps security deposits at one month’s rent. . Last February, the DOS published guidelines for the new law according to which real estate brokers hired by owners “cannot be compensated by the potential tenant”.

In response, several real estate brokerage firms have filed a complaint claiming that the rule change “would have a negative impact on consumers, residential brokers in our community and tenants.” Soon the Supreme Court of New York issued a temporary restraining order, ending the very short ban.

In a ruling last month, Albany Supreme Court Judge Susan Kushner said: “The guidelines were issued in error of law and represent an unlawful intrusion into the power of the legislature and constitute an abuse of discretionary power. “

The New York Real Estate Board applauded the court ruling. “This ruling ensures that thousands of honest and hard-working real estate agents in New York State can earn commissions without fear of unwarranted discipline from the State Department based on its misinterpretation of the Law. housing stability and tenant protection, “James Whelan, President of REBNY, said in a April 9 statement.

“We appreciate the support of our members throughout this difficult process and we are proud to continue to defend the rights of New York realtors.

Renters in New York City have long had to shell out a large lump sum when moving to a new apartment, with fees that could include a security deposit, administration fees, and brokerage fees, which can range from 12 to 15% of the total. annual rent.

A report from the Office of City Comptroller and Mayoral Candidate Scott Stringer from 2018 found that the move could cost New Yorkers more than 20% of a household’s annual income.

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