Brokers said to demand extra fees to place HIV-positive tenants

Department of State is investigating five real estate agents
By Adam Pincus | November 14, 2012 01:30PM

The city and state are investigating five unnamed real estate brokers after receiving complaints that they were demanding money on top of the regulated fee set by the city to place HIV-positive tenants in rental housing.

Four of the complaints were forwarded by investigators at the city’s Human Resources Administration to the New York State Department of State, which investigates real estate licensing complaints. The DOS received one complaint directly.

The investigation was revealed at a meeting yesterday of the DOS’s Board of Real Estate. The meeting was held simultaneously by video link in Manhattan, Albany and Buffalo. The board meets several times a year and is charged with developing rules and regulations affecting real estate licensing. Licensing is overseen by the DOS’s Division of Licensing Services.

Of the unnamed brokers, two were from Queens, two from the Bronx and one from Manhattan, Jack Bilello, a district manager with the Division of Licensing Services, said during the hearing.

The brokerage fee the city pays to find housing for tenants with AIDS has been controversial since the city in March 2011 reduced it from a full commission — equal to a month’s rent — to half that, as part of a plan to reduce spending.

The HRA launched the investigation after receiving complaints as early at 2011 from tenants and AIDS activists, who said brokers demanded to be paid by would-be tenants on top of the 50 percent fee, Zivko Pulisic, an investigator from the HRA’s Investigation, Revenue & Enforcement Administration, said at the hearing. HRA found at least four brokers demanding additional money. (The fifth broker, from Manhattan, was discovered by the Department of State, John Goldman, a license investigator with the Division of Licensing Services, said.)

“Brokers said [to tenants], ‘I don’t work for free, I don’t work for 50 percent,’ ” Pulisic said.

So far for 2012, there have been 800 complaints filed with the DOS, and eight licenses have been revoked or suspended, and a total of $77,000 in fines have been paid, Goldman said. That compares to 919 complaints filed in 2011, 33 licenses revoked or suspended, and $117,000 in fines collected, state records show.