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Operatively, the Department of State's Guidance was withdrawn on February 10, 2020 and therefore it holds no weight in this case.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:

• Ronald A. Sher, Esq. ras@himmelfarb-sher.com, Himmelfarb & Sher, LLP Tel: 914.682.0040
• Andrew M. Lieb, Esq. andrew@liebatlaw.com, Lieb at Law, PC Tel: 646.216.8009
• Carl L. Finger, Esq. carl@fingerandfinger.com, Finger & Finger, PC Tel: 914.949.0308
• Darryl M. Vernon, Esq. dvernon@vgllp.com, Vernon & Ginsburg, LLP Tel: 212.949.7300

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

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.

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?