There appears to be a lot of confusion about a Broker's Agent among real estate agents.

The license law defines such an agent at RPL 443(1)(k) as follows:

“Broker’s agent” means an agent that cooperates or is engaged by a listing agent, buyer’s agent or tenant’s agent (but does not work for the same firm as the listing agent, buyer’s agent or tenant’s agent) to assist the listing agent, buyer’s agent or tenant’s agent in locating a property to sell, buy or lease respectively, for the listing agent’s seller or landlord, the buyer agent’s buyer or the tenant’s agent tenant. The broker’s agent does not have a direct relationship with the seller, buyer, landlord or tenant and the seller, buyer, landlord or tenant can not provide instructions or direction directly to the broker’s agent. Therefore, the seller, buyer, landlord or tenant do not have vicarious liability for the acts of the broker’s agent. The listing agent, buyer’s agent or tenant’s agent do provide direction and instruction to the broker’s agent and therefore the listing agent, buyer’s agent or tenant’s agent will have liability for the broker’s agent.

Interestingly, a broker's agent should not have a client, but only a customer as the term customer is commonly utilized in the industry, albeit not defined by License Law.

The license law defines a client as follows:

Client - The one by whom a broker is employed.

As a result, the definition of Broker's Agent does not permit for a client because it states that a broker's agent is "engaged by" (otherwise known as employed) the "listing agent, buyer’s agent or tenant’s agent" and not by a vendor or vendee. Yes, technically the agent who employs is the client, but DOS Opinions clearly state that a real estate agent needn't make a formal disclosure by way of the form to another real estate agent working on the same matter. Therefore, the agency disclosure form is only necessary to customers (those who the broker's agent is attempting to procure for the deal).

Moreover, the definition of Broker's Agent mentions "vicarious liability", but agents misinterpret this to be their liability and specifically, their insulation from liability. It is not. Instead its the "seller, buyer, landlord or tenant"('s) liability is at issue, not the real estate agents. To be clear, if you are a broker's agent, you can be liable for your wrongs. If you are a seller's agent or buyer's agent who engages a broker's agent, you can be liable for their acts. All the statute states is that a client who has a broker's agent working on their matter in addition to their own real estate agent is not liable for that broker's agent's misconduct.

MHA recently posted their performance report through August 2012. This is the Federal Program that oversees mortgage modifications, short sales, and deeds in lieu of foreclosure. The most interesting statistic was that "81% of eligible non-GSE borrowers entering HAMP in August have received some form of principal reduction with their modification".

To read the report, click here.

This is our first day back from the excellent convention hosted by Douglas Elliman at the Borgata in Atlantic City. The event was spectacular and the real estate agents at Elliman should be proud. At the event we launched our newest continuing education course, Deal Killers and taught agents how to avoid deal killers in order to save their deals. We also taught Conflicts of Interest, which fulfills NAR's ethics requirement for members of HANFRA, LIBOR, and HGAR. There were many other terrific speakers who attended the event and I had the opportunity to see Bette Midler and Randi Zuckerberg. All in all it was a great experience. Thanks.

On October 9, 2012, New York's highest Court heard the case of Douglas Elliman LLC v. Tretter.

To watch the Court's oral arguments, click here and click on the button for webcast.

During the arguments, the Court was faced with the issue of the extent of a broker's fiduciary duty when working as an exclusive agent for a seller and concurrently trying to have potential customers become customers or clients of the broker on different homes / apartments.

The Tretters argument was that if you have an exclusive a broker can't show prospective purchasers another property, especially not one that is not an exclusive listing at your brokerage house.

Douglas Elliman suggested the following rule to the Court: "A broker can show a buyer other properties, the broker can be informative, can be honest, can be straightforward, but cannot prefer the property over the property of their principal". As restated by counsel to Douglas Elliman, the rule is: "The broker can be informative and honest about the unit, but cannot sell the unit over their principal".

While hearing the arguments, the Court focused greatly on a case that they heard back in 2001, called Sonnenschein v. Douglas Elliman. To read the prior case, click here.
The precedent discussed in Tretter from the Sonnenschein decision is as follows:
This Court has not addressed the parameters of a real estate broker's duty under these circumstances. Other jurisdictions have held that, in the absence of an agreement with a principal to the contrary, a broker owes no duty to refrain from “offering the properties of all [its] principals to a prospective customer” (Coldwell Banker Commercial Group v. Camelback Off. Park, 156 Ariz. 226, 230, 751 P.2d 542, 546; *376 McEvoy v. Ginsberg, 345 Mass. 733, 737, 189 N.E.2d 546, 547; see generally, Foley v. Mathias, 211 Iowa 160, 233 N.W. 106; Lemon v. Macklem, 157 Mich. 475, 122 N.W. 77). We find this approach to be consistent with the nature and fundamental requirements of the real estate marketplace in New York. Unless a broker and principal specifically agree otherwise, a broker cannot be expected to decline a prospective purchaser's request to see another property listed for sale with that broker. Any other rule would unreasonably restrain a broker from simultaneously representing two or more principals with similar properties for fear of ***67 **862 violating a fiduciary obligation in the event a buyer chose the property of one principal over that of another. Similarly, such a limitation would frustrate the interests of sellers, who benefit from the opportunity to market their properties to as many potential purchasers as possible, as well as the interests of potential buyers, who often request exposure to a number of properties in order to select the one most suitable to their needs and budget. For these reasons, we decline to impose upon all broker/principal relationships the restrictive view of broker duty that plaintiffs espouse. Of course, a principal remains free to enter into an explicit agreement with a broker to achieve such an exclusive arrangement.

We will stay focused on the decision, but the oral arguments are terrific and both attorneys represented their clients well.

Robert Kiyosaki's Rich Global company filed for Chapter 7 bankruptcy as a result of a judgment obtained by The Learning Annex for $24M. Kiyosaki is the famed author of "Rich Dad, Poor Dad". While many are reporting this in a mocking manner in that Kiyosaki is famed for telling people how to make money, I believe its yet another example of Kiyosaki's message in a positive light.

The message is to separate your assets into different entities that are independent of each other. As a result of Kiyosaki's entity structures, its reported that he is still worth around $80M after the bankruptcy without any of the money being in jeopardy. Now, that is a good benchmark for success.

To read more about Kiyosaki's bankruptcy, go to a great article by businessinsider.com by clicking here.

I am delighted to share a link to this month's The Suffolk Lawyer, which is the official publication of the Suffolk County Bar Association.

This month's edition Focuses on Real Property. Click here to read the publication.

Inside, you can read articles such as "Accommodating Companion Animals" written by the leading experts on the topic over at Jackson Lewis; or you can learn to "Avoid Non-Payment" by the likes of Alicia M. Menechino; and don't every forget the need for a Buyer's Real Estate Agent in  a terrific article by Denise Langweber and her daughter Rebecca entitled "Buyer Beware"; or there is "The Diligence That is Due" by Lance Pomerantz; and lastly everything you need to know about transactions for "Residential Waterfront Properties" by the refined Heather Wright.

I owe a debt of gratitude to these authors for making my task as the Special Section Editor for Real Property  one of the best experiences of my professional life.

The Federal Trade Commission has promulgated regulations to "help marketers avoid making environmental marketing claims that are unfair or deceptive under Section 5 of the FTC Act, 15 U.S.C. [section] 45".

To read the FTC's press release concerning the Green Guides, click here.

For a Summary of the Green Guides, click here.

For the complete Green Guides, click here.

To learn more about these Green Guides and how they relate to Long Island Real Estate, register for our upcoming continuing education course, "To be Green or not to be Green" by clicking here.

https://www.mortgageoversight.com/

During our recent class on Property Management I was asked about Capitalization Rates for property in Long Island. A great website to get this type of information and other commercial real estate statistics is ReisReports. Click here to visit their site.