Broker’s Fees Trial Delayed

Groundbreaking announcement made in February sees new court date set for June

Photo by DAVID ILIFF. License: CC BY-SA 3.0

(NEW YORK, NEW YORK)— With COVID dominating the news cycle, the contentious legislation prohibiting landlords from offloading broker fees to tenants has taken a backseat in recent coverage. The suit brought by REBNY against the state was supposed to go to court last Friday, March 13. A recent report from CurbedNY suggests the new date is sent for June.

The new interpretation of June 2019’s rent regulations sent shock waves through the real estate industry. Misleading headlines announcing “No more broker’s fees” panicked brokers and real estate firms in the city. In fact, broker’s fees remain in place: the only difference is that the proposed interpretation says that tenants would not pay broker’s fees on behalf of a landlord. Brokers panicked, anticipating that they would have to accept lower commissions from landlords, whereas tenants usually have no choice in the matter.

Facing a REBNY-led suit against the Department of State, state Justice Michael Mackey temporary suspended enforcement of the interpretation to give both parties time to prepare their case. The temporary suspension was only to be expected, given the suddenness of the new interpretation.

New York Attorney General Letitia James has now requested another extension on behalf of the DOS. The new date is set for June 12, near the anniversary of last year’s rent reform laws. While REBNY and other firms claim that the interpretation will decimate the real estate industry, the interpretation is in line with standard practices in most other cities. Tenants and tenants’ rights advocacy groups overwhelmingly support the change.

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