Broker Entitled to Implied Commission even without Agreement

The Appellate Court recently decided Harris v. Clancy, a case where the Court ruled that a seller had the burden to prove that a broker had "agreed to forgo a commission" or the Court stated that one would be implied by the Court regardless of the nonexistence of a brokerage agreement.

The Court found support in precedent that held "[a]bsent an agreement not to pay a commission, where a broker has performed as a broker and the seller has accepted the broker's services, an agreement to pay a commission will be implied even in the absence of an agreement regarding a commission ..., and the court will be charged with determining the amount of the commission".

So brokers, while you should always have a brokerage agreement with your client or co-broker to prove how much you are owed, its really your client or co-broker who benefits the most from the agreement, not you. Remember this case the next time that your client or co-broker resists signing your brokerage agreement; then, you may want to share this case with them and say that you are only asking them to sign your agreement to help them out.

Lieb School Expands to Long Island City

Lieb School now offers free continuing education courses in Queens. The first course will be held on May 2nd in the iconic Citigroup Building in Long Island City. For more information visit www.liebschool.com 

Agency Disclosure

Credits: 3

Instructor: Andrew Lieb, Esq. 

Every broker must send their agents to this continuing education course to learn Agency Disclosure.

This course will answer the maddening questions that are always in the back of every real estate agent’s mind in brokerage:  How do I fill out the form? Who do I work for? How can I get both sides of the deal? Can the Department of State fine me if I mess this up? Why does my broker care so much? Does this affect my commission? How about my license?

You will learn the whole enchilada about agency from disclosure in the presence of another broker to disclosure by electronic means to disclosure at an open house to disclosure when your client / customer refuses to sign the form, and so much more.  You will be familiarized with the applicable statute, the relevant regulation, court cases that decipher your duties and DOS Administrative Decisions that fine violators. This course even includes a skills component where you will learn how to fill out the Agency Disclosure Form in every possible scenario. Finally, you will get it right.  It’s mandatory to practice Agency Disclosure and after taking this course, you will.

Making Home Affordable - New Handbook Available - Version 4.4

To access the new Handbook for MHA, inclusive of HAMP and HAFA, click here.

This Handbook is the rules for banks / servicers to modify mortgages, so pay careful attention to detail and make sure that they comply.

Is your buyer precluded from buying US Real Estate?

Check with the Office of Foreign Assets Control at the US Treasury before you help your client buy.

To use the Office's search features by person and country, click Resources on the page and find the feature that fits your need.

Remember, The Office of Foreign Assets Control administers and enforces economic sanctions programs primarily against countries and groups of individuals, such as terrorists and narcotics traffickers. The sanctions can be either comprehensive or selective, using the blocking of assets and trade restrictions to accomplish foreign policy and national security goals.

So, its important to check the Office's Resources frequently as sanctions change and you need to know what the rules are today when working in real estate brokerage.

Taxation of Foreign Investors in Real Estate

Today we are teaching our course, Foreign Buyers, in NYC. Our students will begin to understand the implications of alienage in terms of real estate. We will also discuss the different rules for passive investments v. active investments. Real estate can be held in both fashions and its imperative to understand whether a 30% flat tax will apply on Gross Revenues or if instead a graduated tax will apply to Net Revenues. To help our students understand this topic further, we recommend reading U.S. TAXATION 
OF FOREIGN NATIONALS.

DECISION: A Licensed Building on Public Land is Allowed Without State Approval

Licensing a building on parkland has been addressed by New York’s Court of Appeals last Thursday. If you ever have a commercial client who is interested in building a restaurant or food stand on public land, this is an important case to be familiar with.

In 2008, the New York City Department of Parks and Recreation renovated Union Square Park with the intention of building a restaurant on the pavilion in the northern part of the park. When Chef Driven Market, LLC was given a license to run a restaurant on the pavilion in 2012, the community rose in an uproar, claiming that such a restaurant does not have a purpose in the historic park and hence violates the “public trust doctrine.” The community groups exclaimed that a restaurant in the park itself was unnecessary since there were many restaurants to choose from in the nearby area. The pavilion could be used for better purposes, such as dance classes or debate sessions.

However, New York’s highest court has ruled in favor of the city’s Department of Parks and Recreation, disagreeing with the community groups that the restaurant is in violation of the public trust doctrine. The restaurant, with its reasonable prices, outdoor seating available to the public, and charity events, would add to the park’s appeal beauty, and safety and improve the community as a whole. The community groups may have a different opinion as to what the pavilion should be used for, but this does not mean that the restaurant itself is illegal.

It is also important to note that if the Department had leased, not licensed, the pavilion to Chef Driven Market, LLC, then the restaurant would certainly be unlawful without approval from the State. However, since Chef Driven Market, LLC holds a valid revocable license to run a restaurant with ample oversight from the Department of Parks and Recreations, there is no need to get the state’s approval at all. The difference between a license and a lease is that the license gives the Department ultimate control over the day-to-day activities of the restaurant, even the right to terminate the agreement at will. A lease, on the other hand, would give Chef Driven Market, LLC control over the restaurant and use of the property instead.

Brokers, keep in mind that a brokerage license is required for leases, but NOT for licenses, pursuant to RPL 4401(1). If you know anyone that would like to obtain a license to operate a building on parkland, he or she does not necessarily need the help of a licensed real estate broker to do so!