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Broker Fees Not Dead Just Yet, As Judge Temporarily Halts New Rule
By
Jake Offenhartz
Published Feb 10, 2020
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By
Jake Offenhartz
Published Feb 10, 2020
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Re-cork those champagne bottles, renters — broker fees aren't dead just yet.
On Monday, the New York Supreme Court issued a temporary restraining order halting last week's widely-celebrated ban on landlord-hired brokers charging tenants a commission. The initial guidance — handed down by the Department of State, in an attempt to clarify last summer's rent reforms — caught much of the real estate industry flat-footed.
In response, the Real Estate Board of New York (REBNY) and several big-name brokerages filed a lawsuit accusing the state agency of "illegally overstepping its role" and "engaging in improper rulemaking."
"The announcement of this new rule without warning has caused widespread confusion and havoc among dedicated real estate agents and the clients they serve," said REBNY President James Whelan in a statement. "The sudden decision and the way it was made public was harmful to thousands of hardworking New Yorkers.”
The judge, Michael Mackey of Albany County, sided with the real estate brokers. According to Whelen, the temporary injunction "means that thousands of hardworking, honest real estate agents across New York State can do business in the same way they did prior to last week’s DOS memo without fear of discipline by the DOS."
"We look forward to ultimately resolving this matter in Court in the weeks ahead," he added. "Meanwhile, we appreciate all of our members’ support and vigilance during this period of upheaval and confusion.
State Senator Julia Salazar called the judge's decision "silly."
"The guidance merely clarified the law as it is written," she told Gothamist. "It didn’t create a new law, just as this judge’s opinion doesn’t change the law."
Nevertheless, the decision is expected to stay in place until March 13th, when the Department of State is due back in court.
A spokesperson for the DOS did not respond to a request for comment.
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Jake Offenhartz
Jake Offenhartz is a former Gothamist reporter.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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