Posted on 53 Comments

The time has come to reinvent Real Estate Transactions. Brokers will soon be Obsolete. Read on …

Thursday, February 6, 2020 —– Today’s Paper

World | U.S.| Politics |N.Y. |Business |Opinion| Tech| Science |Health| Sports| Arts| Books |Style| Food|Travel| Magazine| Real Estate| Video|

Brokers in New York have near absolute control over apartment listings and leases.
Brokers in New York have near absolute control over apartment listings and leases.Credit…Karsten Moran for The New York Times
Luis Ferré-Sadurní

By Matthew Haag  and 

  • Published Feb. 5, 2020 Updated Feb. 6, 2020, 5:14 a.m. ET

In New York City’s intensely competitive rental market, tenants usually deal with middlemen known as brokers, who have near absolute control over apartment listings, viewing appointments and leases.

In return, brokers collect fees that can be as much as 15 percent of the annual lease, typically paid in one lump sum by tenants before they can move in.

But late on Tuesday, New York State effectively eliminated them.

In an unexpected addendum to last year’s rent laws, state regulators said renters can no longer be charged broker fees, potentially upending the market and delivering the latest blow to an industry already reeling from new regulations and sweeping tenant protections.

New York is one of the few cities in the country with a broker industry that has such financial leverage over how people rent apartments.

And the elimination of broker fees, in addition to the laws passed last year, pushes New York further as a national leader in creating rules favorable toward renters.

Brokers can still collect a fee, the state said in the revised rules, but it must be paid by the landlord unless a prospective tenant hired them to help find an apartment.

The new rule, buried in a legal guidance on last year’s rent laws, caught lawmakers, many landlords and brokers off guard. The Real Estate Board of New York, the influential trade group, immediately threatened to challenge the rule in court and urged its members to protest.

“This is a dire issue with our members, so we are literally going through every single avenue,” said Reggie Thomas, the board’s senior vice president for government affairs. “It’s an all-hands on deck thing because this came out of left field.”

Brokers warned that the new rules would simply increase what tenants pay in monthly rent, since many landlords will likely pass on the cost of a broker’s fee to their residents in higher rent.

“What was the intended purpose of this?” said Jared Antin, director of sales at Elegran. “If it’s to minimize the cost to the tenant, it just changes when the cost is due. Instead of upfront, they will pay it monthly.”

But state laws limit how much rents can be raised in New York City’s roughly 1 million rent-regulated apartments. There are more than 900,000 market-rate apartments that are not regulated.

Tenant advocates cheered the new broker fee rule, saying it helps tilt an uneven real estate playing field.

“These are important tenant protections and it’s about time we had them,” said Michael McKee, treasurer of the Tenants PAC. “Real estate brokers have been able to get away with a lot for a long time so it’s about time they got reined in.”

Newcomers to New York City have long been mystified and frustrated about having to pay a broker’s fee even when they found an apartment online. But unlike most cities in the United States, landlords often choose not to work directly with renters or market their units on their own. Instead, they hire a broker.

For months, real estate insiders had privately feared this particular interpretation of the new rent laws, which emboldened Democratic lawmakers passed last year after regaining control of the Legislature for the first time in a decade.

The new laws, aimed at protecting tenants and strengthening rent regulations, said that tenants could be charged no more than $20 in fees when applying for an apartment, including background and credit checks. The rent laws passed in June also capped security deposits at one-month’s rent, further diminishing the lump sum amount renters typically must pay before being given keys to an apartment.

It was unclear from the language, however, whether that $20 cap also applied to broker fees or whether it was lawmakers’ intent to abolish the practice of tenants paying broker fees. For a $2,500 per month apartment, a broker could collect up to $4,500 in a one-time payment based on a 15 percent fee.

In its most recent guidance, however, state regulators clarified that the cap did indeed apply to broker fees, effectively banning the practice.

Now, the burden falls on landlords to pay brokers their fees or they can choose to list, market and lease their units on their own. The changes could effectively turn New York’s rental market into a no-fee market if renters choose to hunt for an apartment without hiring a broker themselves.

It was the latest in a long string of recent defeats for New York’s real estate industry, which has seen its power diminished after years of allying itself with Republicans when they were in control in Albany.

“This one is just like salt in the wounds,” said Jay Martin, the executive director of the Community Housing Improvement Program, a trade association representing about 4,000 building owners. “It’s going to decimate the brokerage industry.”

Mr. Martin said the prohibition would disproportionately affect small building owners, who typically outsource the work of showing apartments and finding tenants to real estate brokers.

Given New York City’s exorbitant rents, broker fees have become the target of progressive lawmakers seeking to curb housing costs. Last year, for example, Councilman Keith Powers introduced a bill to cap broker fees at one-month’s rent.

Some tenant activists rejoiced the new guidance, saying it would help reduce the barriers for housing for many tenants and potentially reduce New York’s growing homeless population.

“It’s about rehousing 92,000 homeless people,” said Cea Weaver, the campaign coordinator of Housing Justice for All, a statewide coalition of tenants that pushed for the new rent laws. “Hopefully, it’ll make it easier for people being pushed from substandard housing to substandard housing.”

Still, Ms. Weaver said that she was skeptical the real estate industry would abide by the new guidance, which is subject to change. The best way to protect tenants, she said, was if state lawmakers passed a good cause eviction bill that would make it even harder for landlords to raise rents and evict tenants.

For market-rate apartments, the cost of broker fees could still trickle down, but it might be impossible to pass on the costs to tenants of rent-regulated units. Increases on those rents are set by the government.

About 2.4 million people live in rent-regulated apartments in New York City.

Most significantly Mr. Martin said, the changes could lead thousands of real estate brokers to lose their jobs.

“I don’t think it’s hyperbole to say that,” Mr. Martin said.

There were more than 25,000 licensed real estate brokers in New York City as of early 2019, according to New York’s Department of State.

Eric Benaim, the chief executive of Modern Spaces, a brokerage firm with about 100 employees, said that the changes hurt agents, who make a living based on collecting broker’s fees.

“They are just on this high,” Mr. Benaim said, “of just punishing real estate and those in the business.”

Matthew Haag covers the intersection of real estate and politics in the New York region. He previously was a general assignment and breaking news reporter at The Times and worked as an education reporter at The Dallas Morning News. @matthewhaag

Luis Ferré-Sadurní covers New York State politics in Albany. He joined The Times in June 2017 and previously wrote about housing for the Metro desk. He is originally from San Juan, Puerto Rico. @luisferreA version of this article appears in print on Feb. 6, 2020, Section A, Page 20 of the New York edition with the headline: Shock for Landlords Is Delight for Renters: No More Broker Fees. Order Reprints | Today’s Paper | Subscribe

Read even more on this story… here

53 thoughts on “The time has come to reinvent Real Estate Transactions. Brokers will soon be Obsolete. Read on …

  1. This piece of writing gives clear idea designed for the new visitors of blogging, that genuinely
    how to do running a blog.

  2. We are a group of volunteers and opening a new scheme in our community.
    Your web site offered us with valuable info to
    work on. You’ve done a formidable job and our whole community will be grateful
    to you.

  3. Normally I do not read post on blogs, however I wish
    to say that this write-up very forced me to take a look at and
    do it! Your writing style has been amazed me. Thank you, very
    great article.

  4. Wooden furnishings has one thing very all natural regarding it.
    There is this sense of coziness, of attributes and of style that can be be located in hardwood home furniture.
    Wood is actually birthed from the planet. It feeds the fire, falls to pieces in to
    drafts as well as ashes away. It is actually incredibly close to the human existence in the world.

    Might be that is actually why it reverberates a lot with
    us. May be that is actually why you still obtain that cozy sensation when you contact an abundant mahogany

  5. We’ve been a Gold supplier of Alibaba since 2006
    and enjoying a good reputation from both customers and
    partners. Gold Supplier is a certificate issued by ACP, a third-party
    credit agency. The TrustPass certificate is only
    given to companies that have had their company authenticated and verified by
    ACP, which checks to make sure your company details are all correct, and that your business is legally registered in your country.
    By showing the TrustPass certificate on your website,
    potential business partners will know that you are a real and legitimate business so that they
    can trade with you confidently.

  6. Thank you for the good writeup. It in fact was a amusement account it.
    Look advanced to more added agreeable from you! By the way, how could we communicate? dildok3

  7. Heya i am for the first time here. I came across this board and
    I inn finding It reallly usefhl & it helped me out much.
    I aam hoping to offer one thing again and aid others like you helped me.
    buy essay online reviews
    buy essay online reviews

  8. I think other site proprietors should take this website as an model, very clean and wonderful user friendly style and design, as well
    as the content. You are an expert in this topic!

  9. I was curious if you ever thought of changing the structure of your blog?
    Its very well written; I love what youve got to say.
    But maybe you could a little more in the way of content so people could connect with it better.
    Youve got an awful lot of text for only having one
    or 2 pictures. Maybe you could space it out better?

  10. Great post. I will be experiencing many
    of these issues as well..

  11. If you wish for to improve your experience simply keep visiting this web site and be updated
    with the most recent news update posted here.

  12. The other day, while I was at work, my cousin stole my apple ipad and tested to see if it can survive a 25 foot drop, just so
    sshe can be a youtube sensation. My iPad is noww destroyed and she has 83 views.
    I know thuis is otally off tlpic but I had to shre
    it with someone!

  13. Some genuinely fantastic work on behalf of the owner of this site, absolutely great subject matter.

  14. Please let me know if you’re looking for a article author for your site.

    You have some really good posts and I believe I would
    be a good asset. If you ever want to take some of the load off, I’d really like to write some articles
    for your blog in exchange for a link back to mine. Please shoot me an email if interested.
    Thank you!

  15. Just desire to say your article is as astounding.
    The clarity in your publish is simply cool and i could think
    you are knowledgeable in this subject. Well along
    with your permission let me to grab your RSS feed to stay updated with drawing close post.
    Thank you one million and please continue the gratifying work.

  16. Very descriptive article, I loved that a lot. Will
    there be a part 2?

    1. Yes. In 2022 there will be weekly Articles

  17. You could certainly see your expertise in the article you write.
    The sector hopes for more passionate writers like you who are not afraid to mention how
    they believe. Always follow your heart.

    area 52 delta 8 THC products – area 52 delta 8 THC products

    area 52 delta 8 THC products – Area 52 delta 8 carts

    delta 8 carts Area 52 – area 52 delta 8 THC products

    delta 8 THC area 52 – area 52 delta 8 THC products

    delta 8 area 52 – delta 8 THC for sale area 52

    1. Thanks a lot.

  18. Video-games can easily aid kids create a lot of great skills
    supplied they play these activities in moderation. Moms and dads concentrate extra on the dangers of these activities.
    What they need to have to do is look at the achievable advantages of playing them on smart devices, Personal Computer as well as other systems.

  19. Today, I went to the beach with my children. I found a sea shell and
    gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.” She put the shell to
    her ear and screamed. There was a hermit crab inside and
    it pinched her ear. She never wants to go back!
    LoL I know this is totally off topic but I had to tell someone!

    Have a look at my page: bellevue reporter

  20. Heya! I ϳust wanted tο ask if you ever have any trouble
    with hackers? Mʏ laѕt blog (wordpress) was hacked
    аnd I endеɗ up losing many montһs of hard work due to no data backup.
    Do you һave any solutions tօ ѕtoр hackers?

    1. So far, not a lot of hackers. But a lot of spammers

  21. Ɍight noԝ it appears ⅼike Movable Type іs tһе best blogging platform
    аvailable right noԝ. (from what I’ve read) Is
    tһɑt what yоu are սsing on yоur blog?

  22. Very nice write-up. I definitely appreciate this website.

    Stick with it!

  23. My spouse and I stumbled over here coming from a different web address and thought I
    might check things out. I like what I see so now i am following you.
    Look forward to finding out about your web page again.

  24. Have you ever considered publishing an e-book or
    guest authoring on other websites? I have a blog based upon on the same topics you discuss
    and would love to have you share some stories/information. I know my readers would value your work.

    If you are even remotely interested, feel free
    to shoot me an e-mail.

    1. Thanks. We could be interested.

  25. I am truly glad to read this website posts which consists
    of lots of helpful facts, thanks for providing such data.

  26. I know this if off topic but I’m looking into starting my own blog and was curious what
    all is needed to get set up? I’m assuming having a blog like yours would cost a pretty penny?
    I’m not very web smart so I’m not 100% positive.
    Any tips or advice would be greatly appreciated.

    Thank you

  27. Hi! Do you use Twitter? I’d like to follow you if that would be ok.
    I’m undoubtedly enjoying your blog and look forward to new updates.

  28. I think this is among the most important information for me.
    And i’m glad reading your article. But should remark on few general things, The website style is wonderful, the articles is
    really nice : D. Good job, cheers

  29. Does your website have a contact page? I’m having a tough time locating it but, I’d like to shoot you
    an e-mail. I’ve got some recommendations for your blog you might be interested
    in hearing. Either way, great website and I look forward to seeing it grow over

  30. Attractive section of content. I just stumbled upon your blog and in accession capital to assert that I
    acquire in fact enjoyed account your blog posts. Anyway I’ll be subscribing to your feeds and even I achievement you access consistently quickly.

  31. Its like you read my mind! You seem to know a lot about this, like you wrote the book in it
    or something. I think that you could do with a few pics to drive the
    message home a little bit, but other than that, this is great blog.

    A fantastic read. I’ll certainly be back.

  32. I all the time used to study piece of writing in news papers
    but now as I am a user of web thus from now I am using net for articles, thanks to web.

  33. Howdy would you mind sharing which blog platform you’re using?
    I’m looking to start my own blog soon but I’m having a
    difficult time selecting between BlogEngine/Wordpress/B2evolution and Drupal.
    The reason I ask is because your design seems different then most
    blogs and I’m looking for something unique.
    P.S My apologies for getting off-topic but I had to ask!

  34. You could definitely see your expertise in the article
    you write. The sector hopes for even more passionate writers
    like you who are not afraid to mention how they believe. Always
    follow your heart.

  35. I have been exploring for a bit for any high quality articles or weblog posts on this sort of
    house . Exploring in Yahoo I eventually stumbled upon this website.
    Studying this information So i’m happy to convey that I have a very just right uncanny feeling I came upon just what I needed.
    I so much undoubtedly will make sure to don?t forget
    this web site and give it a look regularly.

  36. Wow, this piece of writing is pleasant, my
    sister is analyzing these kinds of things,
    thus I am going to inform her.

  37. I am sure this piece of writing has touched all the internet visitors, its
    really really nice post on building up new webpage.

  38. It’s actually a great and useful piece of info. I am happy that you simply shared this helpful info with us.
    Please stay us informed like this. Thanks for sharing.

  39. My developer is trying to persuade me to move to .net from PHP.

    I have always disliked the idea because of the expenses.
    But he’s tryiong none the less. I’ve been using WordPress on several
    websites for about a year and am concerned about switching to another platform.
    I have heard fantastic things about Is there a way I can transfer all my wordpress content into it?

    Any kind of help would be really appreciated!

    1. nothing worthwhile is ‘easy”

  40. I think the admin of this site is in fact working hard for his web site,
    for the reason that here every stuff is quality based information.

  41. Do you mind if I quote a couple of your posts as long as I provide credit and sources back to your weblog?
    My website is in the very same area of interest as yours and my
    users would definitely benefit from a lot of the information you provide
    here. Please let me know if this alright with you. Cheers!

  42. My brother suggested I may like this blog. He was once totally right.
    This post truly made my day. You cann’t consider simply how a lot time I had spent for this information! Thank you!

  43. I must thank you for the efforts you have put in penning
    this website. I’m hoping to check out the same high-grade content by you in the future as well.
    In truth, your creative writing abilities has inspired me to
    get my own site now 😉

  44. I’m not sure why but this site is loading very slow for me.

    Is anyone else having this problem or is it a problem on my end?
    I’ll check back later on and see if the problem still exists.

Leave a Reply

Your email address will not be published. Required fields are marked *