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

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