New York Judge Temporarily Halts Broker Commission Ban
A New York judge has issued a temporary injunction on the Department of State guidance banning tenant-paid rental commissions to landlord-retained real estate agents.
NEW YORK CITY- A New York judge has issued a temporary injunction on the Department of State guidance banning tenant-paid rental commissions to landlord-retained real estate agents.
The Real Estate Board of New York and New York Association of Realtors along with several other prominent local brokerages joined forces and filed Article 78 in response to the guidance in Albany County Supreme Court on Monday. The plaintiffs deemed the new guidance created “havoc and confusion” within the real estate industry.
The guidance, which was announced last week, was the first announcement the Department of State made to bring further clarification to the Housing Tenant and Protection Act passed into law in June 2019. But the clarification had the opposite intended effect.
The real estate industry was flipped upside down on its head as many rushed to further understand what the rental-fee ban meant for their businesses and a new broker-fee economy.
The plaintiffs pleaded that the court restrain the new guidance, which would subject real estate brokers to severe injury, including the loss of income and, or jobs.
Following the injunction, REBNY and NYSAR said in a statement, “real estate agents across New York State can do business in the same way they did prior to last week’s DOS memo without fear of discipline by the DOS. We look forward to ultimately resolving this matter in Court in the weeks ahead. Meanwhile, we appreciate all of our members’ support and vigilance during this period of upheaval and confusion.”
Another hearing of whether the restraint is justified is set to take place. Reportedly, REBNY is due back to court March 13 as stated in an email to its members.