Bill Text: NY S05693 | 2013-2014 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relates to clarifying the permissibility of commissions, fees, or other compensation paid to real estate brokers.

Spectrum: Slight Partisan Bill (Republican 2-1)

Status: (Passed) 2014-12-17 - SIGNED CHAP.514 [S05693 Detail]

Download: New_York-2013-S05693-Introduced.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         5693
                              2013-2014 Regular Sessions
                                   I N  S E N A T E
                                     June 5, 2013
                                      ___________
       Introduced  by  Sen.  ZELDIN -- read twice and ordered printed, and when
         printed to be committed to the Committee on Judiciary
       AN ACT to amend the real property law, in  relation  to  clarifying  the
         permissibility of commissions, fees or other compensation paid to real
         estate brokers
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. Section 442 of the real property law, as amended by chapter
    2  45 of the laws of 1982, the opening paragraph as amended by chapter  316
    3  of  the  laws  of  2004, the second undesignated paragraph as amended by
    4  chapter 734 of the laws of 1986, is amended to read as follows:
    5    S 442. Splitting commissions. 1. No real estate broker shall  pay  any
    6  part  of  a fee, commission or other compensation received by the broker
    7  to any person for any service, help or aid  rendered  in  any  place  in
    8  which  this  article  is  applicable,  by  such  person to the broker in
    9  buying, selling, exchanging, leasing, renting or negotiating a loan upon
   10  any real estate including the resale of  a  condominium  OR  COOPERATIVE
   11  APARTMENT  unless  such a person be a duly licensed real estate salesman
   12  regularly associated with such broker or a  duly  licensed  real  estate
   13  broker  or a person regularly engaged in the real estate brokerage busi-
   14  ness in a state outside of New York; provided,  however,  that  notwith-
   15  standing  any  other  provision of this section, it shall be permissible
   16  for a real estate broker to pay any part of a fee, commission, or  other
   17  compensation  received  to  an  unlicensed  corporation or an unlicensed
   18  limited liability company  if  each  of  its  shareholders  or  members,
   19  respectively,  is  associated as an individual with the broker as a duly
   20  licensed associate broker or salesman.
   21    2. Furthermore, notwithstanding any other provision of law,  it  shall
   22  be  permissible  for  a  broker  properly  registered  pursuant  to  the
   23  provisions of article twenty-three-A of the  general  business  law  who
   24  earns  a  commission on the original sale of a cooperative or homeowners
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD11341-02-3
       S. 5693                             2
    1  association interest in real estate, including condominium units to  pay
    2  any  part of a fee, commission or other compensation received for bring-
    3  ing about such sale to a person whose [prinicipal] PRINCIPAL business is
    4  not  the  sale  or  offering  of  cooperatives or homeowners association
    5  interests in real property, including condominium units  in  this  state
    6  but  who  is either: (i) a real estate salesman duly licensed under this
    7  article who is regularly associated with such broker; (ii) a broker duly
    8  licensed under this article; or a person regularly engaged in  the  real
    9  estate brokerage business in a state outside of New York.
   10    [Except  when  permitted  pursuant to the foregoing provisions of this
   11  section no real estate broker shall pay or agree to pay any  part  of  a
   12  fee,  commission,  or other compensation received by the broker, or due,
   13  or to become due to the broker to any person, firm or corporation who or
   14  which is or is to be a party to  the  transaction  in  which  such  fee,
   15  commission or other compensation shall be or become due to the broker.]
   16    3.  NOTHING  IN  THIS SECTION SHALL PROHIBIT A REAL ESTATE BROKER FROM
   17  OFFERING ANY PART OF A FEE, COMMISSION, OR OTHER  COMPENSATION  RECEIVED
   18  BY  THE  BROKER  TO THE SELLER, BUYER, LANDLORD OR TENANT WHO IS BUYING,
   19  SELLING, EXCHANGING, LEASING, RENTING OR NEGOTIATING  A  LOAN  UPON  ANY
   20  REAL  ESTATE INCLUDING THE RESALE OF A CONDOMINIUM OR COOPERATIVE APART-
   21  MENT. SUCH FEE, COMMISSION, OR OTHER COMPENSATION MUST NOT  BE  MADE  TO
   22  THE  SELLER,  BUYER,  LANDLORD  OR  TENANT  FOR  PERFORMING ANY ACTIVITY
   23  REQUIRING A LICENSE UNDER THIS ARTICLE.
   24    S 2. This act shall take effect immediately.