LIEB BLOG

Legal Analysts

Tuesday, September 25, 2012

Brokerage Fee Disputes DON'T Belong in the Commercial Division

In New York State Courts there are distinct Judges that sit to hear commercial cases. These Judges seek to better serve the needs of the business community and our State's economy. To accomplish this goal, there are distinct rules (202.70) in place to provide for earlier assignment of cases and uniform and more thorough procedures for expert discovery. To learn more about the purpose of the commercial division, read the Chief Judge's Task Force report by clicking here

Yet, Real Estate Agents are Professionals, not business people. They are licensed by the Department of State and have certain ethical requirements to maintain their status as a professional. These professionals consist of Brokers and Salespersons. As a result, when these professionals aren't paid and they bring suit to collect their professional fees, they should not sue in the commercial division. 

Here is why. Rule 202.70(c) of the Uniform Civil Rules for the Supreme Court & the County Court states that "Non-commercial cases The following will not be heard int he Commercial Division even if the monetary threshold is met: "(1) Suits to collect professional fees". Therefore, real estate brokerage fee disputes are relegated to a non-commercial part where the litigation is typically over a longer duration, without as precise rules and the parties are not pushed as eagerly to settlement. It seems being a professional is distinct from being a business person and our job as professionals is to uphold the nobility of the profession beyond merely making a profit. The Court System's Rules echo this fact and we should take these rules into our assessments of collectibility of our fees when clients refuse to pay. 

Being a professional changes things. 

Wednesday, September 19, 2012

Foreclosure and the Economy - Some helpful links

Yesterday, we had a wonderful group of real estate agents attend our continuing education course, Foreclosure and the Economy.

During the class, we warned real estate agents not to negotiate with lenders directly unless they comply with the rules for Mortgage Assistance Relief Services and Distressed Property Consultant Contracts.

Here are some helpful links to comply:

Mortgage Assistance Relief Services: http://www.ftc.gov/os/fedreg/2010/december/R911003mars.pdf
Distressed Property Consultants:  http://codes.lp.findlaw.com/nycode/RPP/8/265-b

Wednesday, August 29, 2012

The end of Fannie Mae and Freddie Mac is Coming

Over a year ago, on February 11, 2011 the Obama Administration first announced the winding down of Fannie Mae and Freddie Mac in its Housing Report. The Long Island Education Board's blog on the report can be found by clicking here.

Now, the process continues as Treasury just announced steps its undertaking to expedite the process by modifying its Preferred Stock Purchase Agreement with the Federal Housing Finance Agency, the conservator of Fannie and Freddie. To read Treasury's Press Report, click here.

According to Treasury, new steps are being implemented to prevent Fannie and Freddie from retaining a profit and reentering the market in their prior form.

The takeaway is that the decentralization of mortgages is no joke and is coming. Get ready.