Manhattan, N.Y.

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NEW YORKCITY- A New York judge has issued a temporary injunction on theDepartment of State guidance banning tenant-paid rental commissionsto landlord-retained real estate agents. 

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The Real Estate Board of New York and New York Association ofRealtors along with several other prominent local brokerages joinedforces and filed Article 78 in response to the guidance in AlbanyCounty Supreme Court on Monday. The plaintiffs deemed the newguidance created "havoc and confusion" within the real estateindustry. 

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Theguidance, which was announced last week, was the first announcementthe Department of State made to bring further clarification to theHousing Tenant and Protection Act passed into law in June 2019. Butthe clarification had the opposite intendedeffect. 

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The realestate industry was flipped upside down on its head as many rushedto further understand what the rental-fee ban meant for theirbusinesses and a new broker-fee economy. 

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Theplaintiffs pleaded that the court restrain the new guidance, whichwould subject real estate brokers to severe injury, including theloss of income and, or jobs.

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Following the injunction, REBNY and NYSAR said in a statement,"real estate agents acrossNew York State can do business in the same way they did prior tolast week's DOS memo without fear of discipline by theDOS.  We look forward to ultimately resolving this matterin Court in the weeks ahead. Meanwhile, we appreciate all of ourmembers' support and vigilance during this period of upheaval andconfusion."  

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Another hearing of whether the restraint is justified is set totake place. Reportedly, REBNY is due back to court March 13 asstated in an email to its members.  

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Mariah Brown

Mariah Brown is the New York Bureau Chief and Real Estate Reporter for GlobeSt.com, covering the New York Metro area, Northeast region and national real estate trends. She is responsible for producing multi-media content, including articles, podcasts and video. Before joining the GlobeSt team, she served as a New York Times fellow, reported for the Associated Press in New York and Philadelphia and several other New York City-based outlets.