The Real Estate Board of New York is ringing in 2023 with what the group called “significant” changes to its universal co-brokerage agreement.
The new rules, which are effective Jan. 1, are tightening the language used to advertise listings. Brokers won’t be able to use the term “no-fee,” which the group said misleads customers who don’t understand the term only applies to the listing broker.
The label “off-market” will be prohibited from exclusive listings and those omitted from the RLS by an owner’s opt-out agreement, often used by wealthy clients for discreet marketing.
In cases where an open listing is being advertised as off-market, REBNY can ask for documentation proving the listing is open.
“It’s co-broke or go broke,” a representative for REBNY said.
REBNY is also instituting a “coming soon” status for listings on the RLS, which will give brokers 14 days to switch them to active. The addition comes in response to brokers using the term as a marketing or staging tool without a clear standard, so it’s unclear when a property will hit the market.
Under the new guidelines, brokers will have 14 days to change their listings to active after first posting them under the label, and they won’t be able to show the property until the listing is changed to active.
A third rule clarifies language around commission splits, encouraging brokers to come to a written agreement if they’re pursuing an uneven split for a transaction.
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A final rule change implements the Residential New Development Brokerage Agreement for new development buildings of all sizes. The agreement previously applied only to buildings with 10 or more units.
The change to the RUNDBA makes the agreement universal to all new developments, not just ones with 10 or more units. The rule, previously updated in 2019, was aimed at making life easier for buyers’ brokers by laying rules for commission payments.
The organization approved the changes in October and has since been working to spread the word before they go into effect and has reached roughly 500 member brokers, a representative for REBNY said.
While REBNY publishes yearly updates to the UCBA, it’s rare for rule changes to go beyond minor clarifications. It’s unclear why the organization chose this year to make sweeping changes.
While penalties for violating UCBA rules vary depending on the severity, the punishment for a first-time offense is generally a fine of $500, followed by a fine of up to $2,000 for a second offense and up to $10,000 for a third offense within the same calendar year.