The Daily Dirt: Rental broker fees are back! For now.

An analysis of New York's top real estate news

TRD NEW YORK /
Feb.February 11, 2020 10:19 AM
REBNY President James Whelan (Credit: iStock; Whelan photo by Anuja Shakya)

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

REBNY fought the law, and REBNY won — for the moment, anyway.

A state judge on Monday temporarily halted new rules governing rental broker fees, E.B. Solomont reports. The decision was in response to a lawsuit filed by the Real Estate Board of New York and several major brokerages opposed the Department of State’s interpretation of the rent law. Specifically, DOS maintained that the statute required landlords to pay for their own rental brokers.

REBNY’s attorneys filed a petition Monday in Albany to oppose the change.

“It is clear here the DOS has usurped the role of the Legislature and that its actions constitute an illegal exercise of legislative power,” the lawsuit said. “Clearly, if the Legislature had intended [the laws] to apply to agents of the landlord, or even more explicitly real estate brokers, it would have inserted those words into the statute.”

The decision Monday afternoon provides momentary solace for an industry upended by the state’s guidance. In the days following its distribution, landlords, agents and property managers have scrambled to figure out how to comply. Some companies have already cut down on staff or changed how and when they hire outside agents, while some brokerages decided to shoulder the risk of penalties by ignoring the new rules.

Agents will be able to collect fees as usual without fear of punishment — meaning renters involved in pending lease agreements will likely be on the hook. The next court date is slated for March 13.

City officials are once again taking aim at Amazon, albeit indirectly.

City Council member Justin Brannan wants to add another layer of regulation for warehouse developers, Eddie Small reports. The council member is calling for a special permit requirement for large warehouse projects, which would give the City Council power to stop them.

“A special permit means a community won’t be bulldozed — literally and figuratively — in the development process,” Brannan wrote in an op-ed last week. “Local leaders and elected officials will be able to consider the potential collateral damage to long-term plans for neighborhood development, and potentially be able to reach outcomes that benefit local residents, landlords, retailers, and even consumers.”

Brennan is asking the Department of City Planning to “institute a special-permit requirement for all warehouse development over 250,000 square feet,” which would subject such projects to a process similar to the city’s seven-month Uniform Land Use Review Procedure.

Though Amazon walked away from plans to open a new headquarters in Long Island City, the company has remained active in leasing office space in the city, and has continued to rent and build warehouse space. Brannan contends that last-mile delivery operations pose quality-of-life problems.

What we’re thinking about: Will a state legislator propose the “universal renter protections” that Mayor Bill de Blasio keeps saying he supports? Send a note to [email protected].

CLOSING TIME

Residential: The priciest residential closing recorded Monday was for a condo unit at 157 West 57th Street in Midtown, at $15.7 million.

Commercial: The most expensive commercial closing recorded was for an apartment building at 185 South Fourth Street in Williamsburg, at $31.8 million.

BREAKING GROUND

The largest new building filing of the day was for a 16,303-square-foot residential building at 72 Congress Street in the Cobble Hill. Shiraz Sanjana filed the permit application.

NEW TO THE MARKET

The priciest residential listing to hit the market was for a townhouse at 17 East Ninth Street in the Greenwich Village, at $16 million. Argo’s Cameron Culver
— Research by Mary Diduch

A thing we’ve learned…

Since 1984, Scotland has barred broker fees, but enforcement of the rule only really began in 2012 following a government clarification. Thank you to Kevin Sun for providing this tidbit.

Elsewhere in New York

— A Brooklyn bodega owner allegedly hid untaxed cigarettes from inspectors using a remote-controlled shelf, Gothamist reports. The Department of Taxation and Finance posted a video on Twitter of the shelf.

— City Council Speaker Corey Johnson’s top aide, Erik Bottcher, is eyeing his boss’ seat in Chelsea, The City reports. Bottcher is running to take over for Johnson when he’s term-limited out of office next year.

— A facade on a brownstone in Chelsea collapsed Monday, the New York Daily News reports. No injuries were reported.


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