On October 4, 2013 I had the privilege of attending the legal seminar sponsored by the Legal Affairs Department of the National Association of Realtors®. At this exceptional forum for attorneys who represent Realtor® associations and their state associations, Associate General Counsel Ralph Holmen presented the material on antitrust law. He reminded all attendees that the Department of Justice and National Association of Realtors® stipulation of settlement regarding virtual office websites included a commitment that National Association of Realtor® member boards and their counsel would receive annual updates regarding antitrust law including information about the “final judgment” agreed upon by both sides. This article will address certain potential violations of the antitrust law which appear to be applicable to Realtors® and Realtor® firms in the current environment. These are:
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Just over three years ago, the article “Let the Broker Beware” (Supervision of Independent Contractors) appeared in Real Estate Indepth. In this relatively short period of time, the regulatory scheme has changed dramatically. Agency relationship disclosure under Real Property Law Section 443 has been amended twice. On January 1, 2014 new advertising regulations encompassing real estate teams, the use of the internet, signs, business cards and similar matters will become effective. Recent opinions from the Department of State have eliminated the common practice by broker associates of using corporate titles. Other opinions stringently affirm Regulation Section 175.21 and the duty of the broker to comply with Section 441 of the Real Property Law by providing to salespersons “regular, frequent and consistent personal guidance, instruction, oversight and superintendence”. Changes in the Realtor Code of Ethics have further defined what brokers can and cannot say about each other with restrictions on comments about other real estate professionals.
Continue reading “Broker Compliance and Supervision (Starting Over)”
Most New York State homeowners are familiar with the STAR Exemption program otherwise known as the School Tax Relief Program. The Real Property Tax Law was amended during the administration of Governor George Pataki to create a partial exemption from school taxes for most owner-occupied primary residences in New York State. New York State has now implemented a new registration requirement giving New Yorkers until December 31, 2013 to register with the Department of Taxation and Finance in order to receive the STAR Exemption in 2014.
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The Appellate Division, First Department decision in the case of Alphonse Fletcher, Jr. et al. v. The Dakota, Inc., et al. continues to be the subject of much discussion in the legal community. This case represents a wakeup call for every director of a cooperative corporation or condominium association alerting them once again that they cannot hide behind the “Business Judgment” rule when issues of discrimination are involved. The Appellate Court reversed a prior decision of the same court finding that a director’s participation in a corporation’s tortious behavior is sufficient to give rise to individual liability for the director.
Continue reading “Can a Co-op Director be Held Personally Liable for Discrimination?”
Historically, it has been common practice for real estate licensees in Manhattan and often in other areas of New York State, to be granted by their principal broker, the right for marketing purposes, to refer to themselves as “President, Vice President, Senior Vice President, Executive Vice President, Managing Director” or similar titles. This is a practice also employed by banks and other enterprises in which the use of such titles enhance the apparent stature of the person dealing with a member of the public.
Continue reading “D.O.S. Opinion Ends Use of Corporate Titles by Real Estate Salespersons”
The New York court system is broken up into four separate Judicial “Departments” so that there is a First, Second, Third and Fourth “Department” divided geographically. The New York State Court of Appeals on March 21, 2013 rendered a decision in which it has defined how to measure a seller’s damages for a buyer’s breach of contract in the sale of real property. The Four Departments had reached similar conclusions using different theories of law. New York’s High Court has now placed the State of New York amongst the rest of the fifty states upon holding that, “the measure of damages is the difference, if any, between the contract price and the fair market value of the property at the time of the breach.” The Court went on to also state that a trial court could make a determination about the amount of the loss that included taking into account “[t]he price obtained by the seller on a later resale of the property…”.
Continue reading “New York High Court Determines How to Measure Damages When Buyer Defaults White v. Farrell”
While Realtors uniformly recommend that prospective home purchasers obtain a radon test, few fully understand what radon is and its serious implications. We are well aware that smoking is the leading cause of lung cancer. Few however, are aware that radon is the second leading cause of lung cancer and is ranked highest from “natural causes”.
Continue reading “Radon, the Silent Killer!”
Dramatic advances in technology over the past two decades have changed the way Realtors conduct business. Just twenty years ago, multiple listing services were still printing books of listing data and hand held mobile computing devices were not yet commonplace. Market trends in the real estate industry resulted in larger and larger firms and the day of the small boutique brokerage enterprise seemed to be dying.
The most significant change however, came about just at the turn of the 21st century with the proliferation of real estate teams. Keller Williams and other market innovators promoted the concept of teaming real estate licensees so that the licensees could create brand identification and expertise in multiple disciplines that make real estate sales
profitable. The old model of hiring assistants became a costly option in the real estate recession which began in 2004. Realtors have always been creative and the team concept has been one which enabled brokers to form multi-person teams (a thirty person team is not unheard of) which have become significant in the marketplace.
Traditional brokerage firms have not received the “team concept” easily. Efforts to brand the team rather than the brokerage firm and the significant income that a team can generate, represent a significant threat to the way business was conducted in the
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This article addresses the recent decision in the Civil Court in the City of New York (Richmond County) (Staten Island) issued by Judge Philip S. Straniere, dated September 19, 2012. The case involves a not unusual circumstance, the rental of an illegal apartment by a Landlord and the consequences to the Landlord and Tenant of such illegality.
Mary Beth Acquino, Plantiff, v. Gilbert Ballester, Defendant
2012 NY Slip OP 22267
On May 11, 2007, the Defendant, Gilbert Ballester, purchased a two-family house at 45 Elm Street, Staten Island, New York. The mortgage executed at closing clearly indicates that the premises was “improved by a one or two family dwelling.” Evidence adduced at trial indicated that the Landlord had created illegal apartments in the basement and attic of the building. The Plaintiff, Mary Beth Acquino, observed that there were four apartments in the building, rented the basement apartment and indicated that she believed that the Defendant, Gilbert Ballester, lived in the attic.
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This article will address whether a person who is not licensed as a broker or salesperson under New York law can receive compensation in the form of a “Finder’s Fee” in connection with a real estate transaction.
What is a Finder’s Fee?
“Finder’s Fees” are commonplace in the investment and banking businesses. A finder is usually a person or entity which brings together parties who ultimately enter into a transaction and the finder receives fees or a participating interest in the entities formed as a result of the introductions. For example, when a person introduces a company to an underwriter and the underwriter elects to do an initial public offering for the enterprise, the person who makes the introduction to the underwriting firm is often compensated as a “finder”. When concepts about finder’s fee arrangements are applied to real estate, the first consideration by the finder is to seek compensation without violating the law. The finder often attempts to recast the nature of the services. Introducing a buyer to a seller or a renter to a landlord becomes a consulting arrangement.
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