The Daily Dirt: The fight against broker fee change begins
An analysis of New York's top real estate news
Real estate groups are going to bat against changes to rental broker fees.
The Real Estate Board of New York and the New York Association of Realtors, along with several major residential brokerage firms, plan to file a legal challenge Monday to halt enforcement of the state’s Jan. 31 ruling, E.B. Solomont reports.
“We are asking the court to recognize that the Department of State illegally overstepped its role in issuing new guidance on rental brokerage commissions,” James Whelan, REBNY’s president, said in a statement. “The announcement of this new rule without warning has caused widespread confusion and havoc among dedicated real estate agents and the clients they serve. The sudden decision and the way it was made public was harmful to thousands of hardworking New Yorkers.”
In case you’ve been living under a rock, what has the industry reeling is the state’s interpretation of certain language in last year’s rent law. Specifically, that under the law, landlords must foot the bill for any rental brokers they use. Though owners of high-end rentals and larger multifamily portfolios often pay for brokers anyway, the change will likely hit smaller landlords — and by extension, their brokers — the hardest.
While their representatives wage a legal battle, brokerages and landlords are trying to figure out whether to fundamentally change how they do business. Brokerages have been issuing mixed messages: Some have told their agents to continue as usual, while others have urged caution. Smaller landlords are opting to take over leasing themselves or upping the rents. The full impact of the change, as with much of the rent stabilization law, remains to be seen.
What we’re thinking about: What fresh hell will next week bring for the real estate industry? Send a note to email@example.com.
Residential: The priciest residential closing recorded Friday was for a condo unit at 2376 Broadway on the Upper West Side, at $6.8 million.
Commercial: The most expensive commercial closing recorded was for an office building at 36-01 30th Avenue in Astoria, at $71.6 million.
The largest new building filing of the day was for a 157,500-square-foot residential building at 625 Brook Avenue in the South Bronx. Hudson Companies filed the permit application.
NEW TO THE MARKET
The priciest residential listing to hit the market was for a condo unit at 45 East 22nd Street in the Flatiron District, at $10 million. RSNY Realty’s Chandru Ramnani has the listing. — Research by Mary Diduch
A thing we’ve learned…
Back in 2009, the Los Angeles Times tried to make “The Real Dealers” a thing. In a profile of our then-young company, whose office featured “early Ikea” decor, the newspaper kept referring to TRD’s staff as “the Real Dealers.” Anyway, I’m dead. Thank you to Kevin Sun, who spotted this blast from the past. This Real Dealer got a real kick out of it.
Elsewhere in New York
— Gov. Andrew Cuomo plans to sue the Trump administration over its decision to bar New Yorkers from using the Global Entry and other Trusted Traveler programs, Gothamist reports. “It is extortion. It is hurting New Yorkers to advance their political agenda, and we’re going to fight back,” Cuomo told reporters Friday.
— City officials have accused Police Commissioner Dermot Shea of using the latest crime stats to spread a “false narrative” about bail reform, Politico New York reports. Shea blamed a 17 percent uptick in crime last month on the new state law that eliminated cash bail for misdemeanors and non-violent felonies. An analysis by Politico showed only 7 percent of the increase dealt with such cases.
— I’m not sure why this keeps happening, but New Jersey’s Twitter account declared the state the “pizza capital of the world,” on the heels of calling it the “bagel capital of the world,” the New York Post reports. Maybe the New York Times is to blame: It declared Jersey City’s Razza the best pizza in New York in 2017 and made it virtually impossible for locals to get a table.