LIEB BLOG

How current events impact your business and real estate holdings

Showing posts with label Brokerage Laws. Show all posts
Showing posts with label Brokerage Laws. Show all posts

Saturday, December 07, 2019

DOS Notice to Licensees in Real Estate Brokerage

Licensees just received this notice on Fair Housing. Remember - discriminating in real estate can result in fines, license revocation, and huge judgment awards in lawsuits.

Lieb School is committed to ending discrimination in housing by educating licensees about behaviors that constitute inadvertent discrimination. Lieb School - Where the Law is Followed.


Dear Licensee:

Please see attached Fair Housing Guidance Document. This email is a reminder notification of your obligation as a Real Estate Licensee to adhere to the laws prohibiting discriminatory practices.

If you have any questions pertaining to this topic, please contact us at eAccessNY@dos.ny.gov.

Division of Licensing Services
NYS Department of State



Monday, November 25, 2019

Pointless Legislation? RE Broker Discrimination = License Revocation

Newsday is reporting that "Sen. James Gaughran (D-Huntington) and Assemb. Kimberly Jean-Pierre (D-Babylon) introduced a bill that would expand the state’s authority to suspend or revoke a real estate agent’s license."

Did you know that a law already exists that provides for discrimination = license revocation?

19 NYCRR 175.17(b) states:
No real estate broker or salesperson shall engage in an unlawful discriminatory practice, as proscribed by any federal, state or local law applicable to the activities of real estate licensees in New York State. A finding by any federal, state or local agency or court of competent jurisdiction that a real estate broker or salesperson has engaged in unlawful discriminatory practice in the performance of licensed real estate activities shall be presumptive evidence of untrustworthiness and will subject such licensee to discipline, including a proceeding for revocation. Nothing herein shall limit or restrict the Department from otherwise exercising its authority pursuant to section 441-c of the Real Property Law.

Yes, codifying the law makes sense, but unless DOS prosecutes, what's the point?


Hey Brokers - should a license be lost if a broker is found to have discriminated? 

Just remember, not every charge of discrimination is legitimate.

Let us know your thoughts in comments.





Monday, June 03, 2019

Real Estate Brokerage Regulatory Updates - 5/31/19 NYS Board Of Real Estate Meeting Summary

On 5/31/19 the NYS Board of Real Estate continued its mission of optimizing the regulation of real estate brokers in our state by holding its meeting in NYC, Rochester and Albany. To remind real estate brokers and salespersons, the public is welcome at these meetings where the public can bring comments from the floor. It's encouraged that Lieb School students attend these meetings to have your voices heard. 

"[T]he Board has general authority to promulgate rules and regulations affecting real estate brokers and salespersons in order to administer and effectuate the purposes of Article 12-A of the Real Property Law."

A complete video of the meeting is available here.

In summary, the following was discussed:
  1. Complaints: From 1/1/19 to 4/30/19, the Department of State received 241 complaints about licensees. For perspective, there are 134,964 licensees in New York State.
  2. Testing: In 2018, of the 27,209 individuals who sat for the salesperson exam, 14,172 passed, which is roughly a 52% pass rate; of the 2,215 individuals who sat for the brokers exam, 1,447 passed, which is a 55% pass rate.
  3. Regulations: The Board is considered updating advertising regulations as to web based advertising where lead generation will be specifically addressed. Additionally, corporate titles was raised as a concern and a committee was assigned to study the issue. The simple solution stated was increased enforcement. 
  4. Discrimination: Lawful source of income was discussed and the Department, while working with the Division of Human Rights, is hopefully going to issue guidance. 
Remember, to take Lieb School's online classes to stay ahead of your profession. 


Tuesday, January 22, 2019

Real estate salespersons must receive sexual harassment trainings - by Andrew Lieb

There are two different laws applicable to real estate salespersons and associate real estate brokers in New York City, which require sexual harassment prevention trainings. There is the New York State law and the New York City law. 

Read the full article by Andrew Lieb, Esq. published in the New York Real Estate Journal here. 


Wednesday, July 12, 2017

Lieb at Law: Are Pocket Listings Legal?

A real estate broker whispers to you that they have an off-market listing that is to die for, but you have no idea what an off-market listing is. More so, the way the real estate broker told you about the listing just sounds to you like something is not right about the transaction. Is this pocket listing even legal?
A pocket listing means that the real estate broker has a listing that is not being advertised to the public markets. Isn’t that an illegal monopoly? In the State of New York, contracts or agreements that refrain trade are illegal and void pursuant to the General Business Law §340, or what is commonly referred to as the Donnelly Act. The Donnelly Act is New York’s version of the federal Sherman Antitrust Act where the state and federal laws require identical basic elements.

Thursday, July 06, 2017

BRAND NEW VIDEO CE | Brokerage Lawsuits ONLINE | 4 CE Credits | Lieb School



Brokerage Lawsuits ONLINE is a 4 credit online video real estate CE approved by NY DOS for license renewal. 

This course was developed and instructed by Andrew Lieb, Esq., a premiere NY real estate litigator and compliance trainer that focuses his legal practice on real estate brokerage litigation. 

While enjoying the comfort of your home, you can learn how to sue them for your commission! It’s not simple and it usually takes forever to obtain a favorable resolution. More so, litigation creates exposure for the real estate brokerage and salesperson regardless if they are the plaintiff or the defendant.

This 4 hour course will explain the process of different dispute resolution options such as negotiations, mediation, arbitration and litigation. After completing this course, you will be able to articulate the impact of the Real Estate License Law on such lawsuits, the availability of pre-action Affidavits of Entitlement and Mechanic's Liens to real estate brokers, and how ethics complaints work before the Department of State.

More so, you will understand how the law determines if they are right in their claim or defense by explaining the potential lawsuits for commission and the most common claims against brokerages.

(Works on IPADs, TABLETs, PCs & MACS)

$35.00

Tuesday, February 14, 2017

Important Administrative Decision - Craigslist Advertisements

In DOS v. Paramonov, a licensed real estate salesperson was charged with engaging "in false and or misleading advertising for rental properties" by listing "apartments in the 'no fee' category" of Craigslist because "he did not have enough money to post advertisements in the broker's section of the website."

The respondent was fined for his dishonest and misleading advertisements.

Moving forward, real estate salespersons need to remember that their advertisements must be completely aboveboard. If there is a broker's section of a website, the real estate salesperson must utilize it at all times in order to comply with their license law.

Commission Rates in Real Estate Brokerage are Discretionary to the Broker and Property Owner

A Lieb School student recently took a final exam for our Conflicts of Interest ONLINE course and explained how commission rates are set by the Department of State.

They are NOT.

In fact, the Department of State says the following about commission rates:

Commission Rates

The commission or compensation of a real estate broker is not regulated by statute or regulation, therefore the amount and terms are negotiable. A real estate broker shall never offer a property for sale or lease without the authorization of the owner. Therefore, prior to the listing or marketing of a client’s real property, it is incumbent upon the real estate broker and the client to mutually agree on a reasonable rate of compensation. 

As a result, real estate salespersons and property owners should carefully negotiate commission rates where they also set the consideration that the real estate brokerage will provide to the property owner in exchange for higher or lower rates. To illustrate, a real estate brokerage that is willing to create a video about the property should be able to demand a higher rate than a real estate brokerage who will not create any digital advertising. 

Tuesday, December 27, 2016

Real Estate Brokerage Regulatory Updates - 12/14/16 NYS Board of Real Estate meeting summary

On 12/14/16 the NYS Board of Real Estate continued its mission of optimizing the regulation of real estate brokers in our state by holding its meeting. To remind real estate brokers and salespersons, the public is welcome at these meetings where the public can bring comments from the floor. It's encouraged that Lieb School students attend these meetings to have your voices heard. 

"[T]he Board has general authority to promulgate rules and regulations affecting real estate brokers and salespersons in order to administer and effectuate the purposes of Article 12-A of the Real Property Law."

A complete video of the meeting is available on youtube.

In summary, the following was discussed:
  1. The collaboration between the Department of State and the Division of Human Rights in investigating claims of discrimination and enforcing the law. To date, the Department of State has referred 5 complaints to the Division of Human Rights. 
  2. The Department of State's right, even without subpoena, to request documents from a licensee (including to document requests pertaining to documents that are unrelated to the practice of real estate brokerage) and that a licensee's failure to cooperate may result in a license suspension. 
  3. A new licensing requirement of a 1 hour course on licensee safety is being added to curriculum and to make room for such additional hour the property insurance requirement is being reduced from 2 hours to 1 hour.
  4. The comments period for regulatory changes, [to 175.1 (commingling money), 175.7 (disclosure to clients before accepting money), 176.3 (1 hour license safety course), 177.3 (minimum instruction time of 1 hour rather than 3 hours), 177.7 (computation of time being 50 minutes for an hour requirement) and 175.25 (licensee disclosure of license type on business cards)], has expired and such regulations are expected to be effective in mid January 2017. 
  5. Brokerage firms can utilize cloud storage of their records so long as such cloud technology creates an accurate reproduction of paper records and has technology to permit discovery of any alterations of such records.
  6. The Board of Real Estate meeting schedule for 2017 is April 12, 2017, September 13, 2017 and December 6, 2017. 
The next meeting is expected on April 12, 2017. 



Tuesday, July 19, 2016

New Real Estate License Law Regulation - Discrimination is Serious for your License

Effective May 18, 2016 the license law has been updated in the State of New York and discrimination clearly will no longer be tolerated by salespersons and brokers. The regulations is:

19 NYCRR 175.17(b)

No real estate broker or salesperson shall engage in an unlawful discriminatory practice, as proscribed by any federal, state or local law applicable to the activities of real estate licensees in New York State.

A finding by any federal, state or local agency or court of competent jurisdiction that a real estate broker or salesperson has engaged in unlawful discriminatory practice in the performance of licensed real estate activities shall be presumptive evidence of untrustworthiness and will subject such licensee to discipline, including a proceeding for revocation.

Nothing herein shall limit or restrict the Department from otherwise exercising its authority pursuant to section 441-c of the Real Property Law.

Thursday, March 24, 2016

Notice to all Real Estate Brokers and Salespeople from the Department of State, New York

Tuesday, July 14, 2015

Real Estate Attorneys as Real Estate Brokers

Attorneys don't need a real estate brokerage license to earn a commission. Yet, they can obtain a license by simply paying a fee without even taking the requisite 120 hour class or passing the exam. 

So, why should an attorney bother becoming licensed as a broker? The reason is that it both helps the attorney's clients to gain access to property and it also secures the attorney's ability to split a brokerage commission pursuant to a cooperative brokerage agreement.

Full article in The Suffolk Lawyer, written by Andrew Lieb, Esq. here. 

Friday, June 05, 2015

Real Estate Brokers - DON'T Have Your Clients Sign the LIBOR Sales Agreement

Last evening, Lieb School taught a continuing education course, Estate Deals, at Newsday's Headquarters to over 100 real estate salespersons from the region.

Before the class began, I told the audience about a discussion happening right now between attorneys on the New York State Bar Association's Real Property Law Section's Listserv, called "Real Estate Binders". I advised of the conclusion of the attorneys about how terrible the results are for transacting parties when they sign Sales Agreements prepared by real estate brokers / salespersons who procured the transaction without having such an agreement drafted by a competent attorney. To my shock, many brokers thought I was wrong and they insisted to continue this practice of having their clients sign this one (1) page form contract.

After reading, I hope they will rethink their position because it is quite possible that transacting parties will end up being in a binding contract by way of this Sales Agreement, which is the furthest thing from their intended goal when working with a real estate broker and/or salesperson. The case of Pescatore v. Manniello addresses such a situation wherein the Appellate Division stated that the "agreement satisfied the statute of frauds, as it identified the parties to the subject real estate sales transaction, described the realty to be sold with reasonable particularity, and it stated the purchase price of the realty, the down payment called for as well as its due date, and the balance due upon closing. The agreement also provided for a closing date, and stated that the transaction was not subject to mortgage financing. The additional fact that the agreement stated that a more formal contract was to be signed does not render the purchase deposit agreement unenforceable".

Plus, a real estate salesperson owes their client duties of loyalty, accountability and the use of reasonable care so isn't the salesperson breaching those fiduciary duties to their client by having their client enter into a contract without knowledge of its binding effect and without advising them to utilize instead the twelve (12) page "RESIDENTIAL CONTRACT OF SALE Jointly Prepared by the Real Property Section of the New York State Bar Association, the New York State Land Title Association, the Committee on Real Property Law of the Association of the Bar of the City of New York and the Committee on Real Property Law of the New York County Lawyers' Association. (11/00)", which is supplemented by a tailored Rider by most attorneys in Downstate New York.

The Sales Agreement used by many on long island is hyperlinked.

As can be seen on the face of the agreement, it states: "THIS IS A LEGALLY ENFORCEABLE CONTRACT, YOU SHOULD CONSIDER WHETHER YOU WISH TO CONSULT YOUR ATTORNEY PRIOR TO SIGNING THE SAME". Further, the Sales Agreement contains an attorney approval clause, but such clause is waived unless the Sales Agreement is disapproved by a party's attorney within "3 business days after full execution thereof". Wouldn't it be smarter to just fill out the form without having any party sign the agreement and send the information to an attorney to negotiate within a formal contract of sale?

It comes down to this: Do real estate salespersons care more about the best interest of their clients when creating a meeting of the minds or would they rather mislead the clients that it's a good idea to be in a terrible contract just so that the salesperson feels more secure about receiving a commission?

You decide.

Wednesday, July 02, 2014

Real Estate Broker Record Retention - Proposed Regulatory Change

Did you know that there are laws about keeping real estate brokerage records?



Currently, the applicable law reads:

§175.23 Records of transactions to be maintained 
(a) Each licensed broker shall keep and maintain for a period of three years, records of each transaction effected through his office concerning the sale or mortgage of one- to four-family dwellings. Such
records shall contain the names and addresses of the seller, the buyer, mortgagee, if any, the purchase price and resale price, if any, amount of deposit paid on contract, amount of commission paid to broker or gross 
profit realized by the broker if purchased by him for resale, expenses of procuring the mortgage loan, if any, the net commission or net profit realized by the broker showing the disposition of all payments made by 
the broker. In lieu thereof each broker shall keep and maintain, in connection with each such transaction a copy of (1) contract of sale, (2) commission agreement, (3) closing statement, (4) statement showing 
disposition of proceeds of mortgage loan.  

(b) Each licensed broker engaged in the business of soliciting and granting mortgage loans to purchasers of one to four family dwellings shall keep and maintain for a period of three years, a record of the name 
of the applicant, the amount of the mortgage loan, the closing statement with the disposition of the mortgage proceeds, a copy of the verification of employment and financial status of the applicant, a copy of the inspection and compliance report with the Baker Law requirements of FHA with the name of the inspector. Such records shall be available to the Department of State at all times upon request.

----

However, much of the currently applicable law makes no sense as often a broker does not have a contract of sale in his / her possession and often the broker keeps all records electronically. 

Now, there is a proposal to change the law to reflect reality and the new law would read as follows (underlines being additions to the law):

§175.23 Records of transactions to be maintained 
(a) Each licensed broker shall keep and maintain for a period of three years, paper and/or electronic records of each transaction effected through his or her office concerning the sale [or mortgage] of one- to four-family dwellings. In some transactions, the broker may not be provided a copy of the document required.  In such instances, the broker will not be found to have violated this regulation if said document is not kept and maintained. Records to be kept and maintained shall contain:

 (1) the names and addresses of the seller[,] and the buyer, [mortgagee, if any,] (2) the broker prepared purchase contract or binder, or if the purchase contract is not prepared by the broker, then the purchase price [and resale price, if any,] and the amount of deposit (if collected by broker) [paid on contract], (3) the amount of commission paid to broker, (4) [or g]the gross profit realized by the broker if purchased by him or her for resale, [expenses of procuring the mortgage loan, if any, the net commission or net profit realized by the broker showing the disposition of all payments made by the broker. In lieu thereof each broker shall keep and maintain, in connection with each such transaction a copy of (1) contract of sale, (2) commission agreement, (3) closing statement, (4) statement showing disposition of proceeds of mortgage loan.] (5) any document required under Article 12-A of the Real Property Law and (6) the listing agreement or commission agreement or buyer-broker agreement.  
[(b) Each licensed broker engaged in the business of soliciting and granting mortgage loans to purchasers of one to four family dwellings shall keep and maintain for a period of three years, a record of the name of the applicant, the amount of the mortgage loan, the closing statement with the disposition of the mortgage proceeds, a copy of the verification of employment and financial status of the applicant, a copy of the inspection and compliance report with the Baker Law requirements of FHA with the name of the inspector. Such records shall be available to the Department of State at all times upon request.]

Notate the addition of the sentence "any document required under Article 12-A of the Real Property Law" at the end of the second paragraph. This is a catchall that includes such items as an Agency Disclosure Form and any other document later added to the law.

So, keep an eye on the DOS's Regulatory Activity page to determine when this Recent Proposal will become a Recent Adoption and hence, applicable law, or just keep an eye on the Lieb Blog for simple updates when real estate events happen.