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. 

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.

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.