Closing Attorneys Can Get Referrals from Associates who are Brokers

The NYSBA just released Ethics Opinion 1273 which opines that "[a] lawyer may accept real estate clients referred by an associate in the lawyer’s firm who is also a licensed real estate broker, provided the lawyer does not share legal fees or real estate commissions with the broker/associate and the lawyer obtains the client’s informed consent, confirmed in writing."

However, attorneys should remember that Rule 1.0(j) defines "informed consent" to "denote[] the agreement by a person to a proposed course of conduct after the lawyer has communicated information adequate for the person to make an informed decision, and after the lawyer has adequately explained to the person the material risks of the proposed course of conduct and reasonably available alternatives."

Consequently, simply alerting the client of the situation is not enough. There must be "adequate" explanation of the risks and other options - which theoretically includes hiring an attorney from another firm.

While this opinion will likely be well received by brokers and transactional attorneys alike, it's still filled with a litany of problems because any scorned client is going to claim that they did not receive an adequate explanation to make an informed choice. It's also important to note that the opinion is about the associate referring her client's to the attorney, but what about referring the other side of the deal? That's not addressed by the opinion and it's theorized that would be non-waivable because of the concurrent conflict of interest, but who knows.

Retail Worker Safety Act & Employer Obligation

Retail workers throughout New York State were guaranteed protections from workplace violence on September 4, 2024, when Governor Kathy Hochul signed into law the Retail Worker Safety Act, requiring most businesses that employ retail workers to spot vulnerabilities to violence in their workplaces and train and equip employees with tips and technologies to stop violence. 

The Act, which was passed as Assembly Bill A8947C and amends the state labor law, obligates employers with at least 10 retail employees to develop written violence prevention policies, conduct assessments of possible workplace harm hazards, and provide training on violence prevention techniques for retail employees. These employers must comply with the Act’s requirements by March 1, 2025.

Additionally, the bill requires companies that employ 500 or more retail employees nationwide to install panic buttons throughout their stores or, alternatively, provide wearable or phone-based panic buttons to retail employees to alert law enforcement to workplace violence. Such employers must comply with the panic button requirement by January 1, 2027.

If training does not happen or if your employer must have panic buttons and they do not install them, remember, you can and should insist that it happens while being protected from retaliation by Labor Law 740's Whistleblower protections. 

New NYS Law Impacting Disabled Public Employees

Disability discrimination of public employees got a lot more interesting on September 4, 2024, when NYS Governor Kathy Hochul signed into law Assembly Bill A09935, which requires public employers who deem employees unfit after requiring medical examinations to provide those employees with access to all documents supporting their decisions.

Under the Civil Service Law, employers can seek examinations of employees deemed unfit to perform the duties of their job due to a mental or physical disability, where such disability is also grounds for the employee to receive a reasonable accommodation, under the New York State Human Rights Law and the Federal Americans with Disabilities Act, if such employees can continue to perform the essential functions of their job with the accommodation.

Now, employers must provide, in addition to a notice of the factual basis of its decision, copies of communications between the employer and the medical examiner overseeing the claim, as well as records supporting the determination, to employees who appeal such determinations.

Because employees have only 10 days after the factual notice is served to request a hearing, the law aims to afford employees a complete understanding of the unfitness determination and its basis, allowing them to either make changes to be deemed fit or to be fully informed at a hearing. This can also be essential evidence in a failure-to-accommodation discrimination case. 

The new law goes into effect on January 1, 2025.

Contact an attorney

New Rules of Real Estate Commissions: Essential Updates After the NAR Sitzer Case

The real estate industry is undergoing seismic changes, and the recent NAR Sitzer lawsuit has turned the world of real estate commissions on its head. Whether you’re a broker, an agent, or someone looking to buy or sell a home, understanding these changes is crucial to navigating the new landscape. 

The Landmark Sitzer Settlement: What Happened?

The NAR Sitzer lawsuit has fundamentally altered how real estate commissions are structured and negotiated. In essence, the lawsuit challenged the traditional cooperative compensation rule that caused sellers to pay commissions to both their own broker and the buyer’s broker through required fee sharing. This practice was deemed anti-competitive by a court, leading to a massive settlement and a shift in the industry.

What Does This Mean For Brokers and Agents:

The traditional model of commission splitting is no longer guaranteed. Brokers must now negotiate their compensation separately from the other side of the transaction. This change means that you need to be more strategic in how you structure your agreements and ensure that your clients understand the value you bring to the table.

What Does This Mean For Homebuyers and Sellers:

You might see a change in how you pay for brokerage services. Buyers may now be responsible for paying their broker directly, which could impact your overall budget. However, this also opens up more transparent negotiations, potentially leading to more competitive commission rates. Most importantly, buyers will receive Buyer Brokerage Agreements before touring homes that set forth how much their broker is going to be paid. 

Navigating the New Rules:

With these changes, staying informed and adaptable is key. Brokers need to understand the new legal requirements and adjust their practices accordingly. Here’s what you need to know:

• Contractual Obligations: Understanding the nuances of buyer brokerage agreements is more important than ever. Ensure that your contracts are clear and that both parties understand their responsibilities.
• Negotiation Strategies: With the industry moving away from the traditional cooperative compensation rule, it’s essential to develop new strategies for negotiating commissions and concessions. This is where your expertise as a broker can really shine.

Dive Deeper with The Lieb Cast Podcast:

For an in-depth breakdown of these changes and how they will impact your business, don’t miss our latest episodes of The Lieb Cast:

•  Big Changes in Real Estate Commissions: What You Need to Know: Real Estate Brokerage Attorney Andrew Lieb discusses the NAR Sitzer lawsuit and its implications for both buying and selling brokers. Find out whether you’ll pay more or less in commissions and how to hire a broker in this new reality.
• The New Reality of Real Estate Negotiations: Factoring in Commissions for Net Numbers and Concessions: Attorney Andrew Lieb and his legal team explore how brokers must adapt to new commission structures and the importance of understanding contractual obligations in today’s market.

Broker Continue Education:

To stay ahead of the curve, we highly recommend enrolling in our Compensation Post-NAR Sitzer Lawsuit: This 2.5 credit CE course satisfies the recent legal matters topical requirement for NY real estate salespersons and brokers.

In this on-demand video course, Attorney Andrew Lieb will guide you through:

• The details of the Sitzer case and its implications for real estate commissions.
• Changes to the NAR Cooperative Compensation Rule.
• Best practices for structuring your client relationships and transactions within the new legal framework.

This Continuing Education course is an essential resource for any real estate professional serious about understanding and profiting from the post-Sitzer commission landscape.

Stay informed, stay compliant, and stay competitive with Lieb School and The Lieb Cast!

Contact lead counsel of a real estate brokerage class action, anti-trust, and anticompetitive practices suit. 

FinCEN New Real Estate Reporting Final Rule Issues on Trusts

Effective December 1, 2025, certain individuals involved in real estate closings and settlements are going to be required to report and maintain records on non-financed transfers of residential real property to legal entities and trusts pursuant to this Final Rule, 31 CFR Chapter X, RIN 1506-AB54.

Key Points:

• Reporting persons must file a "Real Estate Report" identifying themselves, the legal entity or trust receiving the property, the beneficial owners, the transferor, and the property, along with transactional information.

• A reasonable reliance standard allows reporting persons to rely on information from others, provided it is certified in writing.

• Under the proposed rule, attorneys could potentially be subject to a reporting requirement.

• The final rule includes exceptions for certain transfers, such as those resulting from grants, death, divorce, and bankruptcy.

• Negligent violations of the final rule could result in a civil penalty of, as of the publication of the final rule, not more than $1,394 for each violation, and an additional civil money penalty of up to $108,489 for a pattern of negligent activity.

Lieb Offering Attorney CLE - Navigating Failure-to-Accommodate Housing Discrimination Lawsuits

Attorney Andrew Lieb's CLE course through Lawline on “Navigating Failure-to-Accommodate Housing Discrimination Lawsuits.” has hundreds of 5 star reviews!

Attorneys can register for the 2 Credit CLE here.

Overview

Discrimination litigation is happening everywhere, every day, across the United States. Did you know that a subset of discrimination litigation, failure-to-accommodate litigation, has nothing to do with discriminatory intent whatsoever? This means that defendants across the country are losing cases, and countless amounts of monetary damages/penalties, because they just don't know the rules of the game. It means that you, a licensed attorney, may even be discriminating against others without knowing it.

This two-hour CLE will teach you how to play the game and then, you can offer invaluable advice and counsel services to your clients whether they be landlords, property managers, HOA-coop-condo boards, tenants, buyers, or sellers. 

According to the CDC, 26% of US adults have some type of disability, which could qualify an individual to request a reasonable accommodation and/or modification in housing. When they do, are you ready to navigate the process and make smart decisions along the way? After this CLE, you will be ready.

Learning Objectives: 

1. Articulate the definition of a cognizable cause of action for failure-to-accommodate housing discrimination

2. Identify case law to analyze each element of a failure-to-accommodate housing discrimination claim and apply facts to the case law

3. Prepare and conduct an interactive process / cooperative dialogue in responding to a request for accommodation/modification

4. Navigate divergences between Federal, State, and Local law in failure-to-accommodate claims