A case of dual agency is coming back to haunt “Million Dollar Listing: New York” co-star Ryan Serhant.
In a new lawsuit, the star agent is accused of misleading the buyer of a Tribeca condominium and selling the pad to him at a “falsely inflated” price. The suit seeks $1 million in damages and a full accounting of the money Serhant made on the deal, in which he represented both buyer and seller.
The suit also names Nest Seekers International and the buyer’s financial advisor, Elad Rahamim of Wells Fargo.
According to the complaint, California-based real estate investor and physician Aaron Coppelson hired Serhant in 2015 to help him find an investment property in New York. Communicating through Rahamim, Coppelseon said Serhant steered him to a 2,517-square foot condo at 416 Washington Street asking $4.495 million that would be worth “well over $5 million” in a short period of time.
Calling the apartment a “gold mine,” Serhant allegedly said it was a deal Coppelson “could not pass up.” According to court filings, Serhant also told Coppelson the seller was under water and needed to sell quickly, therefore the asking price was around 20 percent lower than comparable properties.
In the complaint, Coppelson said he went for it — passing on other deals to buy the Tribeca property for $4.375 million, records show.
He only found out that Serhant was representing the seller, too, about a year later, according to the suit.
Whether Coppelson overpaid will be argued in court, but he clearly bought at the peak of the market. In 2018, condo and co-op sales had the largest year-over-year decline in five years since the financial crisis, according to a Douglas Elliman/Miller Samuel report. The average sale price for co-ops and condos in 2018 dropped 3.6 percent to $1.97 million, while inventory was up 11.8 percent.
In an email to The Real Deal, Serhant confirmed that he sold Coppelson the apartment. “He seemed very happy with his purchase at the time,” Serhant wrote, suggesting that most of Coppelson’s grievances are with his financial advisor.
“Since then our firm has listed a number of his properties as well, both in NY and LA,” Serhant said. “No fraud took place. I wish him the best of luck with the sale.”
In 2017, Coppelson listed the apartment at 416 Washington for $4.75 million with Nest Seekers’ Ron Ovadia, according to StreetEasy. After several price chops, it is now asking $3.995 million.
Coppelson has also had real estate troubles in Los Angeles. According to a federal complaint unsealed last year, Coppelson hired Jeffrey Yohai, the former son-in-law of Paul Manafort, to broker a deal for a basketball player to rent his L.A. home for two months for $160,000. According to the complaint, the player lived in the home but the money never made it to Coppelson. Instead, court documents claimed, Yohai planned to get Coppelson’s money from a marijuana grower who owed him money. Yohai allegedly showed up at Coppelson’s house and tried to pay him with a large bag of marijuana, but Coppelson refused. Yohai pleaded guilty to real estate fraud charges in early 2018, but new charges were brought in November.
In recent months, the concept of dual agency has been under the microscope.
In 2018, a class-action lawsuit accused brokerage Houlihan Lawrence of “predatory” behavior, claiming that dual agency is a fundamental part of the firm’s business plan. Houlihan filed a motion to dismiss the suit, but this past May, New York’s Supreme Court allowed it to proceed.
Dual agency is entirely legal in New York, where a 2011 law upped disclosure rules. (Brokers are supposed to receive their clients’ consent.) Nationally, the Consumer Federation of America has called on states to ban the practice.