LIEB BLOG

Legal Analysts

Wednesday, March 31, 2021

Court Finds that Landlord's Agent CAN be Sued for Charging Brokerage Fee to Tenant under HSTPA

Can a landlord's agent charge a tenant its commission?

That issue is going to be decided by the New York County Supreme Court in the case of McLendon v. Kelley after the court refused to dismiss the case, but the case should already be dismissed under the Court's own reasoning.

The law that the tenant is relying on in this case to block the fee charge is called The Housing Stability and Tenant Protection Act (HSTPA) and specifically, Real Property Law 238-a(1)(a), which states as follows:

Except in instances where statutes or regulations provide for a payment, fee or charge, no landlord, lessor, sub-lessor or grantor may demand any payment, fee, or charge for the processing, review or acceptance of an application, or demand any other payment, fee or charge before or at the beginning of the tenancy, except background checks and credit checks as provided by paragraph (b) of this subdivision, provided that this subdivision shall not apply to entrance fees charged by continuing care retirement communities licensed pursuant to article forty-six or forty-six-A of the public health law, assisted living providers licensed pursuant to article forty-six-B of the public health law, adult care facilities licensed pursuant to article seven of the social services law, senior residential communities that have submitted an offering plan to the attorney general, or not-for-profit independent retirement communities that offer personal emergency response, housekeeping, transportation and meals to their residents.

In refusing to dismiss the case on this law, the Court focused on the Department of State's Guidance on the topic wherein the Department had opined "that a broker for the landlord could not collect a broker fee from a perspective tenant pursuant to the above provision." However, the Court's reasoning is in error and the broker should bring a motion to reargue / renew this application for dismissal.

Operatively, the Department of State's Guidance was withdrawn on February 10, 2020 and therefore it holds no weight in this case. To substantiate this withdrawal of Guidance, see the notation at question 5. on page 4 of this hyperlink.

More importantly, in Real Estate Bd. of New York v. New York State Department of State, the Judge issued a full injunction preventing the statute from being utilized against brokers until the Court issues a decision on REBNY's Order to Show Cause, which has not yet occurred. 

This case should therefore be dismissed.

 



NY Association of Realty Managers: Seminar on Reasonable Accommodation Notice in Rental Housing

NYARM - SEMINAR: MARCH 31, 2021

TIME: 5:30PM – 7:00PM / REGISTRATION SIGNIN @5:00PM

COST: FREE

TOPIC: REASONABLE ACCOMMODATION NOTICE IN RENTAL HOUSING

NEW YORK STATE EXECUTIVE LAW 296.2-b AND 296.18-a

MODERATOR:

  • MARGIE RUSSELL, EXECUTIVE DIRECTOR, NEW YORK ASSOCIATION OF REALTY MANAGERS
  • RONALD A. SHER, ESQ. - SEMINAR MODERATOR

I. TOPIC INTRODUCTION

  • "The ABC's of Reasonable Accommodations"
  • "A Fair Housing Primer: Accessibility & Accommodation"
  • "Reasonable Accommodation Notice - New York State Executive Law"
  • "Corporate Governance: Reasonable Accommodation Policy"
  • "Implementation of Protocols & Establishment of Procedures"
  • "Service Pets - Emotional Support Animals"
  • "The Pitfalls and Problems - Dos & Don'ts - Warnings"
  • "Avoiding Calamity, Catastrophe & Casualty - Averting Disaster"
  • "Legal Issues & Claims: Directors & Officers Coverage"
  • "Concerns & Consequences of Claims"

II. PRESENTATION - MODERATOR & PANELISTS:
III. QUESTIONS AND ANSWERS - OPEN DISCUSSION

IV. MATERIALS: (download here)
  • NYSAG - Service Animals in Public Accommodations Brochure
  • FAQ: NYC Commission of Human Rights - Emotional Support Animals
  • FAQ: USDOJ - Services Animals
  • Presentation: Accessibility Discrimination for Realty Managers – Andrew M. Lieb, Esq.
  • Presentation: Reasonable Accommodations – Carl L. Finger, Esq.
  • Presentation: Service Pets & Emotional Support Animals – Darren M. Vernon, Esq.
REGISTRATION:
  • Email Margie Russell, NYARM's Executive Director the following information: Name, Company, Position, Email
  • Zoom Waiting Room opens at 5pm on 3/31

  • Call 929 205 6099
    Login: ZOOM LINK
    Meeting ID: 995 4731 7998
    Passcode: 189986




Thursday, March 25, 2021

New Law Requiring Two Witnesses for Power of Attorney Forms

Starting on June 13, 2021, filing out a power of attorney is going to be a little more annoying.
Previously, the form just had to be signed, initialed, and dated by a principal with capacity, but now you are going to need 2 disinterested witnesses as well.
The new law, Senate Bill S888, is curiously only applicable to financial and estate planning, but why?
Its stated purpose is to provide extra protection against fraud and abuse, but how does adding 2 witnesses accomplish that?
Couldn’t you find witnesses to abuse the form too if that was your goal?
Isn’t this just another piece of lip service legislation?
Penalties are the answer, not witnesses, just saying…

UPDATE on New Tenant Disclosure Form on Reasonable Modification and Accommodation

As an update on our BLOG on the new law requiring a disclosure form on reasonable modifications and accommodations, Governor Cuomo just signed Senate Bill S867 which removes the requirement that all landlords conspicuously post the disclosure form in all vacant listings. According to the New York State Senate website, “this measure was seen as an excessive mandate on landlords and difficult to enforce uniformly.”

Also, the new law is now under Section 170-d of the Executive Law. It was previously passed under Section 296 of the New York State Human Rights Law. This change means the failure to serve the disclosure form is no longer a listed discriminatory practice under the New York State Human Rights Law. Thus, it is unclear whether any penalty or enforcement is available on the new law or if it is just another lip service law.

As to the disclosure form itself, you can now access the New York State Division of Human Rights’ published disclosure form HERE.



Thursday, March 18, 2021

Fair Housing Education Now Mandatory for Appraisers

On March 17, 2021, NYS adopted a new regulation to be effective January 1, 2022, that mandates fair housing education as a condition of license renewal for appraisers.

The following subjects and number of hours are required under this new regulation:

(A) 7 Hour Introduction to Fair Housing and Fair Lending Instruction

        (1) Fair housing, fair lending requirements, and the history of lending, 2 hours

        (2) Development of appraisal (standard 1 USPAP), 1.5 hours

        (3) Reporting of appraisal reports (standard 2 USPAP), 1.5 hours

        (4) Case Studies, 2 hours

(B) 4 Hour Update to Fair Housing and Fair Lending Instruction

        (1) Fair housing, fair lending requirements, and the history of lending, 1 hour

        (2) Development of appraisal (standard 1 USPAP), 1 hour

        (3) Reporting of appraisal reports (standard 2 USPAP), 1hour

        (4) Case Studies, 1 hour

While it may be important to have additional fair housing education, how much education on fair housing is considered enough?

Should a 7-hour course on the introduction and a 4-hour update necessary to renew a license or certification, or should it be more or less?

Do you agree with NYS or how would you do it differently if you were in charge?




Wednesday, March 17, 2021

NY Employees are Entitled to Paid Leave to Receive COVID-19 Vaccine

To further encourage mass vaccination, the Governor signed Senate Bill S2588A into law, which requires employers to provide employees with a "sufficient period of time", but not more than four (4) hours, of paid leave to receive each COVID-19 vaccine injection. The law is effective immediately and expires on December 31, 2022.


Employers must pay employees at their regular rate of pay for all hours of vaccination leave and may not require employees to first use other entitled leave (e.g. NYS Paid Sick Leave, NYC Paid Sick and Safe Leave, Employer sick leave policy). 


The law is noticeably silent on what if any verification an employer can request from an employee to prove they received the vaccine during the leave and how much notice an employee needs to provide prior to using such leave. The Department of Labor has yet to issue guidance on these issues.


How much notice before taking leave do you think should be required?

Should employees be required to submit verification to employers that they actually used the leave to get vaccinated?



Thursday, March 11, 2021

Real Estate Brokerage - 3/11/2021 NYS Board of Real Estate meeting summary

On March 11, 2021, 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. Its 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:

  • 5 hearings that have been held by the DOS and 10 others that scheduled as a result of the Newsday Long Island Divided expose;
  • Brokerages compliance with the Executive Orders about essential workers and safety in light of COVID;
  • Communication with Complainants and Respondents about outcomes of Administrative cases; 
  • Current real estate licensee numbers for February 2020 and February 2021 were provided in a report;
  • 27 Schools have submitted course applications for the 2.5 hours of business ethics topic (Lieb School is one of these schools);
  • 23 Schools have submitted course applications for the 1 hour of recent legal matters topic (Lieb School is one of these schools);
  • 2020 Exam Results:
    • Salesperson = 17,643 applicants with a pass rate of 59%
    • Broker = 1,464 applicants with a pass rate of 65%
  • Executive Order Updates:
    • Extension of the Licenses continued through March 28, 2021
    • Electronic Notarization of Documents continued through March 28, 2021
The next meeting will be Thursday, July 22, 2021 at 1PM. 




New Law Extends Commercial Eviction Moratorium to May 1, 2021 for Small Businesses

On March 10, 2021, Governor Cuomo signed the COVID-19 Emergency Protect our Small Businesses Act of 2021 (“Act”). In summary, the Act provides some commercial tenants with an opportunity to submit a Hardship Declaration, which upon submission to the Court or landlord, stays most evictions and ejectment actions until May 1, 2021. The second part of the Act which provides for commercial mortgage foreclosure relief is discussed in a separate blog HERE.

Applicability
  • The Act applies to summary proceedings or any other judicial or administrative proceeding to recover possession of a commercial unit, including evictions and ejectment actions.
  • The Act only applies to a commercial tenant who:
    • is a resident of New York State;
    • is independently owned and operated;
    • is not dominant in its field; and
    • employs fifty or fewer persons.

Hardship Declaration
  • The Act requires the Court or the landlord (depending on the status of the eviction proceeding) to provide the tenant with the Hardship Declaration in English and in the language of the lease / tenancy agreement.
  • The tenant should complete the Hardship Declaration if the tenant is suffering a financial hardship and is unable to pay rent or other financial obligations or obtain alternative suitable commercial property because of:
    • significant loss of revenue;
    • significant increase in necessary expenses related to providing protective equipment to prevent transmission of COVID-19; or
    • moving expenses and difficulty securing alternative commercial property.

New Commercial Proceedings
  • If there is no pending proceeding and a tenant provides a Hardship Declaration to the landlord, the landlord is prohibited from commencing any proceeding until May 1, 2021.
  • If the tenant does not provide a Hardship Declaration, the landlord is required to file and serve the following to commence an action:
    • affidavit of service of the Hardship Declaration in English and the language of the commercial lease / tenancy agreement;
    • affidavit of service of predicate notices required by law and the lease;
    • affidavit of the landlord / landlord’s agent attesting to the following:
      • Landlord / his agent did not receive a Hardship Declaration from the Tenant; or
      • The tenant returned the Hardship Declaration but the tenant is “persistently and unreasonably engaging in behavior that substantially infringes on the use and enjoyment of other tenants or occupants or causes a substantial safety hazard to others, with a specific description of the behavior alleged.”
  • If the Court determines that the landlord failed to provide the Hardship Declaration to the tenant, the Court shall stay the proceedings for at least 10 business days to allow the tenant to complete the Hardship Declaration.

Pending Commercial Proceedings
  • Refers to proceedings commenced on or before March 7, 2020 and commenced within 30 days of March 10, 2021.
  • Stayed for at least 60 days, or to such later date the Court deems necessary to provide tenants time to complete and submit the hardship declaration.
  • Court shall issue stay and mail copy of the Hardship Declaration to the tenant.
  • If the tenant provides a completed Hardship Declaration to the Court or landlord, the matter is stayed until May 1, 2021.

Post-Warrant of Eviction
  • In any proceeding in which an eviction warrant has already been issued, execution is stayed until the court holds a status conference with the parties.
  • If the tenant provides a Hardship Declaration, the execution of the warrant is stayed until May 1, 2021.
  • For the sheriff to execute the warrant of eviction, it must now state:
    • The tenant has not submitted a Hardship Declaration and the tenant was properly served with a copy of the Hardship Declaration, listing dates of service by the petitioner and the court; or
    • The tenant is ineligible for a stay under this act because the court determined that the tenant is persistently and unreasonably engaging in behavior that infringes on the use and enjoyment of other tenants/occupants or causes a safety hazard to others with a specific description of the behavior.


New Commercial Mortgage Foreclosure Relief Law Signed

On March 10, 2021, Governor Cuomo signed the COVID-19 Emergency Protect our Small Businesses Act of 2021 (“Act”). The Act provides additional relief to commercial tenants from evictions and to owners of commercial property from foreclosure proceedings. In summary, the Act provides owners of commercial properties with an opportunity to submit a Hardship Declaration as published by the Office of Court Administration which effectively stays the enforcement or commencement of commercial foreclosure proceedings until May 1, 2021.

Applicability
  • The Act applies to owners or mortgagors of commercial properties who:
    • owns 10 or fewer commercial units (directly or indirectly; units may be in more than 1 property or building as long as total units are occupied or available for rent);
    • is a business that is a resident in New York State;
    • is independently owned and operated;
    • is not dominant in its field; and
    • employs 50 or fewer persons.
  • The Act does not apply to mortgage loans backed by a state corporate governmental agency.

Hardship Declaration
  • The Act requires the Court or the foreclosing party (depending on the status of the foreclosure proceeding) to provide the borrower with a statement of protections available under the Act in 14-point type (“Hardship Declaration”).
  • More importantly, the borrower must complete the Hardship Declaration and provide it to the foreclosing party to be afforded relief under the Act, if the borrower is suffering a financial hardship including, but not limited to:
    • a significant loss of revenue;
    • a significant increase in necessary expenses related to providing protective equipment to prevent transmission of COVID-19;
    • moving expenses and difficulty securing alternative property; or
    • a commercial tenants’ default on a significant amount of rent since March 1, 2020,
  • The borrower’s submission of the Hardship Declaration is a rebuttable presumption of a financial hardship for purposes of establishing a defense.

New Commercial Foreclosure Proceedings
  • If the borrower provides a Hardship Declaration to the foreclosing party/foreclosing party’s agent, the foreclosing party is prohibited from commencing any foreclosure proceeding until May 1, 2021.
  • If the borrower does not provide a hardship affidavit, the lender is required to file the following to commence a foreclosure proceeding:
    • affidavit of service of the Hardship Declaration in; and
    • affidavit of the foreclosing party / foreclosing party’s agent attesting that the foreclosing party or his agent did not receive a Hardship Declaration from the Borrower.
  • If the Court determines that the foreclosing party failed to provide the Hardship Declaration to the borrower, the court shall stay the foreclosure for at least 10 days to allow the borrower to complete the Hardship Declaration.

Pending Commercial Foreclosure Proceedings / Pre-Judgment
  • Refers to proceedings commenced before March 7, 2020 or commenced within 30 days of March 10, 2021.
  • Stayed for at least 60 days to May 9, 2021, or to such later date the Court deems necessary to provide borrower time to complete and submit the hardship declaration.
  • Court shall issue stay and mail copy of the Hardship Declaration to the borrower.
  • If the borrower provides a completed Hardship Declaration to the court or lender, the foreclosure proceedings are stayed until May 1, 2021.

Post-Judgment
  • In any foreclosure proceeding in which a judgment of sale has already been issued, execution is stayed until the court holds a status conference with the parties.
  • If the borrower provides a Hardship Declaration, the execution of the warrant is stayed until May 1, 2021.


Expect New Federal Sex Discrimination Laws & Regulations by the End of 2021