The Real Deal New York

AG calls on NY brokers to give rebates

Change to Real Property Law was approved in December

April 20, 2015 05:25PM

Schneiderman Broker Law

From left: Lee Zeldin, Charles Lavine and Eric Schneiderman

Attorney General Eric Schneiderman made a push Monday for the state’s real estate brokers to take advantage of a recent change to the state’s Real Property Law that allows brokers to rebate a portion of their commissions to clients.

Schneiderman’s office issued an open letter to brokers licensed in the state, and encouraged buyers and sellers to negotiate to pay a lower commission.

“Rebating by real estate brokers can greatly reduce the costs of buying and selling property and even facilitate new and innovative business models,” Schneiderman said in a statement.

The bill, introduced in 2013 by Sen. Lee Zeldin of Long Island and Assembly member Charles Lavine, amends a section of the law titled “splitting commissions.” In December, the bill was signed into law.

The amended language aims to make clear that a buyer’s agent is able to rebate part of the commission he or she receives from the seller or seller’s agent. Schneiderman said this is usually the only practical way for a buyer’s agent to offer a discount for services.

In the past, brokers expressed concerns that the legislation appears to “cheapen the business.”

Last week, the Attorney General’s office reached a settlement with Lower Manhattan developer Peter Moore, thus banning him from real estate in the state for the next six months, as The Real Deal reported. – Mark Maurer

  • Edward Johnson

    is this for multi-family (commercial) and residential brokerage fees?

    • comment flagged

      any, as far as I am aware, the state does not distinguish between residential and commercial when it comes to license law.

  • Just Saying

    Maybe Mr. Schneiderman would like to rebate some of his pay to the taxpayers rather than focusing on a hard working group of independent contractors who already pay some of the highest taxes in the nation, have to pay for their own health care and have no benefits unlike most of those who benefit from the brokerage community services. Shame on you Mr. Schneiderman for suggesting a kick back is acceptable.

    • comment flagged

      NYS AG didn’t invent the RE brokerage business model. Blame your broker if you’re unhappy. Blame the system if that doesn’t work.

      • Billy De Lazzzzzio

        I blame the communist democrat currupt NYS politicians like silver, cuomo and schneirderman for all the lame regulations in the first place.

        • comment flagged

          Blame them all you want, but licensing law and the structure of real estate brokerage is not something that came into existence recently.

          • billy de lazzzzzio

            I assume that you are not in the business so you have no idea what you are talking about.

  • nancy

    May I dig into your pocket as I make suggestions
    May I did into my doctors pocket as I advocate
    May I dig into a lawyers poker
    A financial advisors pocke
    Ask for a discount on all services
    Most brokers work very hard and seven days a week and no guaranteed income….no paycheck at themed of the week

    • WannaBeLandlord

      I agree if you earn a commission you deserve it. Thought there aren’t any other biz model’s still paying 5 or 6% commissions on a sale. Bond traders are fighting a over tick (1/32 of 1%)

      • nancy

        After 25 years if we received 1% there would be no reals estate agents … Most traders recieve salaries and bonuses and trade hundreds of millions of dollars

        • WannaBeLandlord

          Tell that to an experienced sales side wall st. worker. Its commish

        • comment flagged

          good. maybe there should be fewer with more transactions per agent. It does not make sense that there are tens of thousands in NYC.

          • nancy

            As in most sales businesses 10% do 90% of business
            And Wall Street is not real estate

  • Billy De Lazzzzzio

    Vote Democrat and give your commissions away. Share the Wealth as they say!!!! All you will be left with is some hope and change!!!!!!

    • comment flagged

      So are you saying that Republicans are pro-strong-regulations and pro-strong licensing law? This clarification by DOS only enables brokers and agents to have more legal freedom to make business decisions for themselves.

      • nancy

        I’d rather the ability to offer someone unlicensed a referral fee then give a kick back to a buyer!!!! Buyers should not be paid….we negotiate on behalf of sellers and buyers to make two people come together

        • comment flagged

          that’s fine. Would you like to have the hypothetical *option* to rebate the buyer though? Was it really better when the practice was legally ambiguous? arguing against the practice is different than arguing it should be illegal.

          • nancy

            Absolutly not. If I negotiate off a commission to get a deal done (mind you Maybe a half a point) it would be to the seller
            I would not pay a buyer for my services

          • comment flagged

            You would not rebate a buyer, fine. Do you think rebating a buyer should be illegal?

    • nancy

      I never (ok once) vote republican as that’s bull
      I am not a capitalist
      Successful and hard working and if 1% of my income helps others BRAVO as then those unfortunate can participate in the economy

      • Marc

        You are free to give any of your money away to where you choose but I don’t need you or any other people determining for me what to do with my money.

  • nancy

    Do what you want
    Sounds like kick back
    I feels unethical to me and should not be used as a negotiating tool and can also be confusing at tax time and can lead to illegal funny business

  • richard

    He should ask all of the bloated “color of law” taxing agencies to offer to remove or reduce the charges or offer kickbacks to buyers. We see how much waste comes from the additional charges for all the Redevelopment Authorities. All businesses would have a 30% reduction if the State did not offer all of their political incentives to get political donations.