search

The Real Deal Logo

Trending

Compass scores ‘W’ as team departs SerhantCompass scores ‘W’ as team departs SerhantKevin Garnett sues title, escrow firms in Malibu mansion disputeKevin Garnett sues title, escrow firms in Malibu mansion disputeFlorida laws tied to HOAs, condo-hotels, insurance go into effect July 1Florida laws tied to HOAs, condo-hotels, insurance go into effect July 1Uncommon Developers dunk appeal against 405-unit apartment complex in Van NuysUncommon Developers dunk appeal against 405-unit apartment complex in Van Nuys
Popular
New York

Three more months in limbo: Broker-fee ban lawsuit delayed

The temporary restraining order issued last month will remain in place until summer

New York Attorney General Letitia James and REBNY president James Whelan (Credit: James by Bonnie Biess/Getty Images for SiriusXM; Whelan by Anuja Shakya)
New York Attorney General Letitia James and REBNY president James Whelan (Credit: James by Bonnie Biess/Getty Images for SiriusXM; Whelan by Anuja Shakya)

The uncertain future of broker fee payments will be prolonged until at least June.

On Friday, the office of New York Attorney General Letitia James requested an extension to respond to the real estate industry’s Article 78 petition until May 1 and the industry agreed to the delay, according to court documents and a statement sent by the Real Estate Board of New York. The parties will now meet in court on June 12.

The petition was filed last month in Albany County Supreme Court after the Department of State issued guidance that effectively banned tenants from paying broker fees for an agent hired by the landlord. It marked a reversal of the long-standing practice of tenants footing the bill in New York City’s rental market.

REBNY, the New York Association of Realtors and 12 brokerage firms called state regulators’ guidance an “unlawful, erroneous, and arbitrary” interpretation of New York’s rent law passed in June and quickly appealed to the courts to halt and overturn the DOS’ interpretation.

Less than a week after the state guidance was issued, a New York judge granted a temporary restraining order that barred the state’s guidance on tenant-paid broker fees from going into effect.

Sign Up for the undefined Newsletter

The parties were next due to appear in court on March 13, until the two sides reached an agreement on Friday to delay proceedings.

“Attorneys for the government and the industry recognize the complexity of the issues raised in the matter and agree that additional time is necessary for preparation of court documents,” REBNY president Jim Whelan said in a statement.

The temporary restraining order halting the DOS guidance will remain in place until the June court date.

Write to Erin Hudson at ekh@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
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
REBNY President Jim Whelan (Credit: iStock; Whelan by Anuja Shakya)
Popular
New York
Rental commissions are back — for now
Tags
REBNY
Recommended For You