“Batching” may exist in a grey area for the brokerage world, but The Real Estate Board of New York has taken a hard line.
The group flatly rejected a question to the its “Legal Line” newsletter if waiting until the end of the month to report closed listings in bulk to the RLS was an “acceptable practice.” In addition to informing members that closing information must be updated into the RLS within 24 of closing, REBNY doubled down on its stance when approached by The Real Deal.
A spokesperson said “any violation could result in financial penalties and possible suspension or expulsion from the RLS.”
Stephen Kliegerman, who chairs REBNY’s New Development Committee, said he noticed in the past six to 12 months that a number of new developments were batch reporting, which led him to encourage REBNY to make a statement.
“Many of us in the industry feel [batch reporting] hinders and hurts the market, because that information is important information to show how, in this situation, healthy the market is,” Kliegerman said. “But more importantly, also it’s transparency and data, which in 2022, we should have.”
Reports like Olshan Realty’s weekly analysis of contracts signed at $4 million and above rely on data that can be troubled by batch reporting.
“Once you see eight or nine listings that are updated the same date you know it can’t be true,” Donna Olshan, president of Olshan Realty, said. “It wouldn’t be tolerated in another industry. Dates mean something.”
Jason Haber, an agent with Compass, said suspension from the RLS may seem harsh, but the policy sets the tone for agents.
“The guidelines aren’t there to make brokers’ lives easier or to help spur sales,” Haber said. “They’re there to protect the consumer and to bring transparent information to the consumer.”
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Brokers and developers fudging sales numbers is nothing new.
Reporting contracts sent out or a number of nonbindinding sales agreements were among the tactics to round up activity to paint a building in success identified in a 2016 TRD investigation.
The claims of victory reside in a grey area, but misrepresentation can spark legal consequences, like in the case of Donald Trump Jr.’s 2009 claim the Trump Soho condo-hotel project was 55 percent sold. In reality, a sworn affidavit by a Trump partner filed with the New York Attorney General showed only 15.8 percent of units were in contract by March 2010.
That miscalculation led Manhattan Attorney Cyrus Vance, Jr. to conduct a criminal investigation into whether the lies constituted securities fraud. Attorney Adam Leitman Bailey later confirmed in a letter the developers agreed to settle and refund 90 percent of buyers their deposits.
Bailey brushed off REBNY’s recent declaration, but pointed to the recent resignation of Compass’ Heather McDonough Domi from REBNY’s Residential Brokerage Board of Directors, in which the broker criticized the association for a lack of agent input at the top level, as a driving factor behind the statement.
“I know that REBNY needed to come out immediately with something supporting brokers or dealing with brokers,” Bailey said. “I guess this is their answer, but I don’t see this as an issue in the industry.”