Wednesday, February 27, 2013

Is My Broker Required to Release My License?

Yes and the broker must do so immediately says the Department of State in Department of State v. Gill, Vassel and Heritage Realty, Inc. at 2283 DOS 07 where it was held that: "The failure to make such a filing until some one or two months after the termination of association with their brokerage, Respondents Vassel and Heritage violated RPL §442-b, and demonstrated incompetency. DLS v James, 10 DOS 93."

Specifically, the Department of State referred to Real Property Law 442-b when it made its decision. The statute states:


Discontinuance or change of salesperson’s association; report: When the association of any real estate salesperson shall have been terminated for any reason whatsoever, his broker shall forthwith notify the Department of State thereof in such manner as the department shall prescribe. Where change of such salesperson’s association is the basis for such termination, the salesperson’s successor broker shall forthwith notify the department of such change in such manner as the department shall

Therefore, the broker has the duty to release a license forthwith.

To learn more about brokerage statutes and regulations in NY and how the actually effect your life and livelihood  register for Lieb School today.

Does the Department of State hear Brokerage Commission Claims?

Generally no.

Real Property Law 442-e(5) provides the Secretary of State with the power to enforce the provisions of Real Property Law Article 12-A, which is the statute applicable to Real Estate Agents in the State of New York. Section 442-e is the basis under which the Department of State hears Administrative Complaints.

With respect to commission disputes, Section 442-e(3) provides as follows:

Penalty recoverable by person aggrieved. In case the offender shall 
have received any sum of money as commission, compensation or profit by 
or in consequence of his violation of any provision of this article, he shall 
also be liable to a penalty of not less than the amount of the sum of money 
received by him as such commission, compensation or profit and not more 
than four times the sum so received by him, as may be determined by the 
court, which penalty may be sued for and recovered by any person aggrieved 
and for his use and benefit, in any court of competent jurisdiction.

Therefore, it appears that commission disputes could be heard by the Department of State, at first glance. Yet, the Courts have also spoken on this issue in Matter of Gouiran v. Department of State of State of N.Y., at 82 AD2d 832. 

In this case, the Appellate Division adopted the Dissent from Partridge v. Lomenzo when it states: "it is ”improper for the Secretary of State to interfere with pending civil actions relative to brokerage claims and such actions ought to be left to judicial determination "“. 

Consequently, while commission can be addressed by the Department of State, it should not serve as the primary basis for the complaint, but instead for violations of license law, whereas the Courts or arbitration are the best forum for commission disputes. 

To learn about this and other commission topics, register for Lieb School's continuing education course, Deal Killers, Don't Let Your Deal Die, this Friday at Chase Plaza in NYC by clicking here

Tuesday, February 26, 2013

Mediate Your Hurricane Sandy Homeowners' Insurance Claims

Yesterday, Governor Andrew M. Cuomo announced the creation of a voluntary mediation process for homeowners disputing their insurance claims from Hurricane Sandy.

To read the press release, click here.

Under the program, which is regulated by the Department of Financial Services, insurers must offer and pay for the mediation. So, homeowners, take their offer and go mediate your claims.

Remember, mediation is not binding and if you don't like the results, you can simply not make a deal and start a lawsuit.

However, these programs have been utilized in other States after similar natural disasters and, to illustrate, the Florida Department of Insurance had a 92% settlement rate utilizing such a program. So, homeowners seem to feel positive about mediating their homeowners' insurance claims.

Also, homeowners, don't be shy about utilizing the services of an attorney at a mediation. Being represented in a negotiation concerning the technicalities of your insurance policy is always a good idea. To find an attorney who is competent on a given topic, its always a good starting place to contact your local Bar Association.

Good luck.

Monday, February 25, 2013

Suffolk County Minimum Lease Term = 1 Year

Did you know that the Suffolk County Code has a minimum lease term of 1 year?

Did you know that the lease term has to be in writing?

Well these rules are the default rules, at least, and are applicable unless the tenant waives the provision, which also must be in writing pursuant to section 696-3. So, don't simply use a form lease or go month-to-month as you will clearly violate the Code. Instead, write a formal lease and if its for a term of less than 1 year, make sure to include the applicable waiver language.

If you don't, section 696-5 provides that you can be charged with a misdemeanor with a fine of up to $500, plus a private right of action exists that enables the damaged party (tenant) to get attorneys fees and up to $500 by way of the Code.

Sunday, February 24, 2013

Technology of Building Tickets in NYC

While reading the NY Times at the gym this morning, a habit I have to avoid engaging in small talk with strangers in between reps, I was struck by the article SimCity, for Real: Measuring an Untidy Metropolis, which gives a glimpse into the future of buildings, urban planning and enforcement.

The article talks about the future of cities employing science to generate efficiency in terms of water use and energy by analyzing sources of waste through computerized sensors. It discusses a needed future in terms of creating an optimal urban environment with more effective policies for the enforcement of noise ordinances coupled with just plain old common sense of better scheduling of garbage pickup times.

The article focuses on New York University’s Center for Urban Science and Progress and its use of sensors, research and statistics to optimize New York City as its living laboratory. In all, its a great article by Steve Lohr and a must read for anyone who works in real estate.

Yet, what real estate professionals must really focus on is not just the future, but the current state of things. Thankfully, the article also discusses how these technologies are employed today. It explains that in 2010 under Mayor Michael R. Bloomberg, New York City set up a team of data scientists for special projects and focused on zoning issues by mining data to predict where to send the City's building inspectors resulting in more than 20,000 complaints. So, landlords and property owners be ware; now you not only have to worry about your neighbors / tenants complaints to the City, but the City is also taking a proactive approach to enforcement. And, yes, the City is correct. Zoning rules are in place to create a safe environment for building occupants. Its time to get to know your Code, understand your tenants rights or SimCity (NYC) will find you and ticket you.

Thursday, February 14, 2013

Rental Registration in New York City

Question: Does a Legal Two Family in Queens need a rental permit? 

In general, New York City does not have rental permits per se; however, there are registration requirements for "multiple dwelling" buildings.  The New York State Multiple Dwelling Law defines a "multiple dwelling" as a building containing three or more separate units.  All multiple dwelling buildings in New York City are required to be registered with the Department of Housing Preservation and Development (HPD).

A legal two is classified as a private dwelling since it has less than three units.  This means it does not have to automatically register with HPD in the same way a multiple dwelling must.  However, a one or two family private dwelling must register with HPD if the owner of the building does not reside within the boundaries of New York City.  In that situation, not only must the owner register the building, but he must also register an agent with HPD.  While there are no special licensing or professional requirements for this agent, he must reside within the boundaries of New York City.

If a building is not registered with HPD, the owner may be charged with a misdemeanor and/or fined up to $500 for their first violation.  In addition, any person who assists with a violation of the registration requirement may be charged with the same penalties.  As for broker liability, it can be argued that listing a rental that is not registered with HPD qualifies as assisting in violating the registration requirement; however, this is not explicitly stated.

Registration is extremely easy for an owner to perform and can be done online through HPD's website.  For an introduction into the basics of New York City Rentals, check out this packet provided by HPD.  Useful Information About Housing Rules and Regulations.


Monday, February 11, 2013

Insurance Coverage & Broker's Duty

New York's highest Court, the Court of Appeals, has clarified that an insured need not review its policy if it specifically asks the broker for a particular coverage, and has a right to bring an action against the broker for his failure to obtain such coverage, in its decision in American building Supply Corp. v. Petrocelli Group, Inc., which can be read by clicking here.

This is a scary decision because it will become a he said / she said battle of whether the specific coverage was, in fact, requested, which may be done orally, and it eliminates the duty on members of society (individuals and businesses) to read contracts and be presumed to understand its terms - this is a cleaner way for society to exist where one is responsible for his own contracts.

While the Court places the burden on the insured to prove that he requested the specific coverage, it will be hard to ascertain whether the coverage was specifically requested. In fact, the Court is clear to state that a general request does not create a duty in the broker to obtain the coverage. Yet, how specific must the request be? If you have ever spoken to a lay business owner or property owner you know that it's never as specific as you would like. This will become a ripe area for litigation as to whether the request was made and how specific it was made, which seems to require a trial as it will always be a question of fact.

Additionally, what this author thinks is wrong, an insurance broker does not have a duty to recommend coverage that is not requested, which is also a rule that is reaffirmed in this decision.