search

The Real Deal Logo

Trending

Financially strapped co-op escapes Mitchell-Lama with first-ever conversionFinancially strapped co-op escapes Mitchell-Lama with first-ever conversionDeveloper Brandon Miller in intensive careDeveloper Brandon Miller in intensive careCompass scores ‘W’ as team departs SerhantCompass scores ‘W’ as team departs SerhantEquity Residential tenants demand $700M, alleging illegal rent hikesEquity Residential tenants demand $700M, alleging illegal rent hikes
Popular
New York

Rental commissions are back — for now

Temporary restraining order issued after REBNY challenges state rule

REBNY President Jim Whelan (Credit: iStock; Whelan by Anuja Shakya)
REBNY President James Whelan (Credit: iStock; Whelan by Anuja Shakya)

Rental commissions are back!

A New York judge granted a temporary restraining order Monday afternoon, halting a Department of State guidance barring tenant-paid rental commissions from going into effect. The guidance, circulated Feb. 4, would have blocked tenants from paying rental commissions in cases where the landlord hired an agent to market the listing.

But amid heavy backlash from rental brokers who said their livelihoods were at stake, the industry filed an Article 78 petition this morning in Albany.

In the petition, filed by the Real Estate Board of New York, New York Association of Realtors and a dozen New York brokerage firms, lawyers argued that the guidance wreaked “havoc and confusion” on the industry. The suit claimed the guidance was an “unlawful, erroneous, and arbitrary” interpretation of New York’s rent law passed in June.

In a statement, REBNY and NYSAR said they look forward to resolving the issue in court “in the weeks ahead.” In the meantime, agents will be able to “do business in the same way they did prior to last week’s DOS memo without fear of discipline by the DOS.”

Sign Up for the undefined Newsletter

The plaintiffs argued that rental agents would suffer irreparable injury — the loss of income and in some cases, jobs — unless the restraining order were issued. The next step in the process would be a hearing on whether a preliminary injunction is justified. It was not immediately clear if the Cuomo administration would appeal Monday’s decision.

In an email to members, REBNY said it would be back in court March 13. In the meantime, agents can go back to business as usual.

“Landlord’s agents can collect a commission from a tenant until further notice,” the email said.

Write to E.B. Solomont at eb@therealdeal.com

Read more of our coverage on New Yorku2019s broker fee upheaval

James Whelan and Julia Salazar (Credit: Getty Images, Facebook, iStock)
Politics
New York
End of tenant-pays broker fees is “death knell” that will cost jobs and up rents, industry says
(Credit: iStock)
Popular
New York
Tenant advocates celebrate landlords’ having to pay broker fees
Boston Mayor Martin Walsh (Credit: Getty Images)
Politics
New York
Boston takes a cue from New York, looks to reverse broker fee system
Following the latest rule changes in New York, Boston appears to be the last major city where tenant-paid broker fees are common practice.
Popular
New York
Broker fees for NYC rentals mystified outsiders. Here’s how other US cities do it
Top row, from left: Warburg Realty's Frederick Peters, Compass' Rory Golod and R New York's Stefani Berkin; bottom row, from left: Bohemia Realty Group's Sarah Saltzberg, Corcoran Group’s Gary Malin, Triplemint's Philip Lang and Bold New York's Jordan Sachs
Popular
New York
Ignore or adhere: Brokerages divided in response to rental fee ban
From left: Douglas Elliman's Howard Lorber, Brown Harris Stevens' Bess Freedman, REBNY's James Whelan, Bohemia Realty's Sara Saltzberg and Corcoran's Pam Liebman
Popular
New York
Real estate industry to sue NYS over rental commission ban
Here’s how landlords and property managers are dealing with the changes to broker fees (Credit: iStock)
Politics
New York
“I feel really bad for those agents”: How landlords and property managers are responding to broker fee rule
REBNY President James Whelan (Credit: iStock; Whelan photo by Anuja Shakya)
Popular
New York
Stop the “havoc and confusion:” Industry petitions to overturn ban on broker fees
Tags
NYC BrokersREBNYRent LawRent LawsRent Regulation
Recommended For You