Rental Broker Fees Are Still Alive Until At Least The Summer
Brokers will be allowed to collect commissions from tenants until the summer at least, after a court date on the matter was moved back.
The industry was caught by surprise last month when state regulators announced that tenants could no longer be charged a broker fee if that broker was acting for a landlord. Members of the real estate industry, incensed by the changes, filed an Article 78 petition following the rule change, and a judge issued a temporary restraining order on the changes.
The matter had been due back in court this week, but State Attorney General Letitia James requested an adjournment, and the matter will return to court on June 12, Crain’s New York Business reports.
“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, agreed to an adjournment in the lawsuit filed last month in Albany County Supreme Court,” REBNY President James Whelan said in a statement Friday. “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.”
In New York City, it is common practice for tenants to pay as much as 15% of the annual rent to a broker, even if that broker is representing the landlord. The proposed changes are attached to the state’s strict new rent reforms passed last year, which much of the real estate industry has railed against, arguing they will cause widespread disruption to the rental market in New York City.
Tenant advocates have welcomed many of the changes, though some renters say many brokers and landlords are still flouting the new rules, The New York Times reported last week. Though the fees are in place for the time being, the industry is already preparing for what the changes could mean.
“Changing it isn't just, you know, a wave of the pen. It really upsets the way the market has been structured for a long, long time,” David Sigman, principal at developer LCOR, told Bisnow last month. "Small guys are going to get hurt.”