February 10, 2020 Comments Off on REBNY, Brokerages File Suit Over New State Rule on Fees Views: 385 New York News, Top New York

REBNY, Brokerages File Suit Over New State Rule on Fees

(Updated with new information)
The Real Estate Board of New York (REBNY) is joining residential brokerage firms in a lawsuit prompted by New York State’s issuance of guidance that prohibits renters from being charged a broker fee. The lawsuit was filed on Feb. 10; the same day, a judge put a temporary halt on enforcement of the ban.

“We are asking the court to recognize that the Department of State illegally overstepped its role in issuing its new guidance on rental brokerage commissions,” said REBNY president James Whelan. “The announcement of this new rule without warning has caused widespread confusion and havoc among dedicated real estate agents and the clients they serve.”

The lawsuit alleges that the Department of State usurped its role by engaging in improper rulemaking, rather than following the necessary and required legal procedures. Moreover, the Department of State’s decision to announce this new rule in such a way has created “widespread disruption for property owners, rental agents and prospective tenants themselves,” according to REBNY.

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