URGENT ALERT- updated 2/10/2020
DEAR HGAR MLS MEMBERS: As many of you know, on Friday, February 7, 2020, HGAR issued an URGENT ALERT regarding the DOS Guidance issued on January 31, 2020, in which the New York State Department of State (DOS) published an updated “Guidance for Real Estate Professionals Concerning Statewide Housing Security & Tenant Protection Act of 2019 and the Housing Stability and Tenant Protection Act” (“DOS Guidance”)
IT RELATED TO THE FAQ #5 and PAYMENT OF “BROKER FEES” BY TENANTS.
A New York judge in Albany has granted a Temporary Restraining Order (“TRO”) this afternoon, halting specifically the DOS’s guidance with respect to FAQ#5 whereby the DOS had barred the payment of Tenant-paid rental commissions (“broker fees”).
The DOS Guidance had prohibited tenants from paying rental commissions in cases where the landlord hired an agent to market the listing. Early on Monday morning, REBNY, NYSAR and other brokerage firms filed an Article 78 Proceeding requesting a TRO against the DOS, which has been granted.
To our knowledge, no other part of the DOS Guidance was halted or modified by the TRO.
UPDATED NOTICE – IN LIGHT OF THE RECENTLY ISSUED TEMPORARY RESTRAINING ORDER AND, UNTIL FURTHER NOTICE, BROKERS AND AGENTS MAY CONTINUE TO COLLECT “BROKER FEES”IN THE SAME MANNER AS WAS CUSTOMARY PRIOR TO THE ISSUANCE OF THE DOS GUIDANCE.
AT THIS TIME, HGAR MEMBERS DO NOT NEED TO MODIFY ANY LISTINGS AS RECOMMENDED BY HGAR’S PREVIOUS ALERT.
Breaking news, The Real Deal ! (see https://therealdeal.com/2020/02/10/judge-halts-rental-commission-ban/) reported that: “In a statement, REBNY and NYSAR said they look forward to resolving the issue in court ‘in the weeks ahead.’ In the meantime, agents will be able to ‘do business in the same way they did prior to last week’s DOS memo without fear of discipline by the DOS.’
The plaintiffs argued that rental agents would suffer irreparable injury unless the restraining order were issued. The next step in the process would be a hearing on whether a preliminary injunction is justified. It was not immediately clear if the Cuomo administration would appeal Monday’s decision. In to this email to members, REBNY said it would head back to court on March 13.
In the meantime, agents can go back to business as usual. “Landlord’s agents can collect a commission from a tenant until further notice,’ the email said.”
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