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Who Pays Realtor Fee

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Who Pays Realtor Fee

Postby DJS2020 » Thu Jun 11, 2020 3:04 pm

I found a property in Port Washington on Long Island, listed on Zillow. The contact associated with the listing was a Realtor. I reached out and asked to see the unit. We didn't sign anything with anyone.

I had questions and the Realtor gave me the Landlord's contact info. We subsequently reached an agreement and were ready to sign the lease with the Landlord. I just got a text from the Realtor that I should bring a check for one month's rent to the signing for her commission (not that it matters but this is in addition to 2 months security and 1st months rent).

As far as I'm concerned, I haven't used a Realtor in this process. The Realtor that listed the property is a fiduciary for the landlord - why would I pay for the listing agent's commission?

What would have happened if I had my own realtor? Would I have had to pay the listing agent AND my realtor? I specifically didn't use a realtor to avoid paying.

Has anyone heard this before? I currently rent in NYC and we DID use a realtor to find this property - we paid him one month rent to OUR realtor but we didn't pay the listing agent.
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Re: Who Pays Realtor Fee

Postby TenantNet » Thu Jun 11, 2020 3:35 pm

What do you mean by fiduciary for the LL? I presume you mean the agent is an agent of the LL, there being some sort of financial connection. If so, then yes, there's no commission due in our opinion.

Chances are the LL and agent are in cahoots with each other. If they can get away with that, then you will probably experience other frauds if you take the place.

Second, look at the new 2019 rent law changes. See viewtopic.php?f=24&t=13981 and look at Judge Lebovits treatise, part 1 (page 13 of the file, page 44 of the document) where it says, 2019 law, "Tenants in RS and unregulated units may not be required to deposit more than 1 month's rent as security deposit," and "Abolishes pre-paid rent advances. No more first and last month's rent accepted or required at beginning of tenancy."

So it seems the LL/agent are charging illegal amounts. I hope you go to the Attorney General's office about this.

As for Brokers' Fees, there is some confusion. I seem to remember there being a lawsuit challenging this part of the new laws, but I don't know if that's been resolved. But see https://thecity.nyc/2020/02/new-york-re ... nated.html

or

https://therealdeal.com/2020/02/05/owne ... e-guidance

and

https://therealdeal.com/2020/02/10/judg ... ssion-ban/

and

https://www.nytimes.com/2020/03/04/nyre ... -fees.html

Obviously there is ongoing confusion.

I would google NYS Brokers' Fees to see if there are any more recent articles.
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Re: Who Pays Realtor Fee

Postby DJS2020 » Fri Jun 12, 2020 5:40 am

Thanks. Great information.

So it does seem that the tenant paying the landlords broker fee is pretty common. We called a few other places and other realtors in the area also indicated the tenant was responsible for paying the listing agents fee.

There was a law against this that was passed in June and went into effect in February. It was contested by several large realtors in court and the courts were going to hear arguments from both sides in mid March. However due to coronavirus it was pushed to early September.

Anyway we refused to pay the fee and lost the apartment. I guess properties that don’t charge a fee are listed as ‘no fee’, and listings that say nothing the prospective tenant should assume a fee (at least until September decision)
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Re: Who Pays Realtor Fee

Postby TenantNet » Fri Jun 12, 2020 5:49 am

May be common, but also might be illegal.

I assume you mean June 2019, which we refer to above. That part of the law is murky right now and I can't say where the legal challenge stands.

"No Fee" has been around forever and depends on the market. The part about the broker having to be not related financially to the LL ... that is not new.
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Re: Who Pays Realtor Fee

Postby DJS2020 » Fri Jun 12, 2020 3:37 pm

Yes, sorry - i did mean June 2019 (what you referred to above). I guess until the murkiness is clarified, the current system will continue. This is all new to me, as the system is completely different in every other place I lived (including 4 other states, CT where I own rental property, and my current apartment in NYC, which I now guess was 'no fee').

Anyway, it seems pretty ridiculous to ask a tenant to pay for a service provided to landlord but I guess my opinion doesn't count!

Thanks for the quick and thorough replies.
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