Your Long Island Real Estate Broker May Owe You Money
Confusion runs rampant in response to the Housing Security and Tenant Protection Act of 2019. Many entities have found the laws ambiguous. Others are fully aware of their obligations, but have chosen to take advantage of the fact that much of the population is somewhat ignorant about what the law requires.
Some tenants know. But competition remains fierce for real estate in the Long Island area. Many tenants pay up, fearing the landlord will decide not to rent to them if they choose to make an issue out of the new law.
Recent changes in real estate law capped landlord application fees at $20 per applicant. However, they failed to cap broker fees until the New York Department of State clarified that brokers could not charge more than $20 either.
From June, when the Housing Security and Tenant Protection Act passed, to September, some brokers were charging hundreds, or even thousands, of dollars in fees. They were in violation of the law.
The New York Department of State issued a memo to clarify the issue. The memo did not mention whether brokers were required to issue a refund. Nevertheless, contacting them and asking might produce results. In many cases it’s going to be less expensive for them to pay the refund than it is for them to litigate the issue.
The law doesn’t currently prevent brokers from charging broker’s fees which are separate from application fees.
These new laws do not cover fees which may apply to co-ops or condos. They are strictly apartment rental fees. Co-op boards tend to charge up to $650 in application fees and often collect large deposits to cover maintenance costs.
If a landlord has charged you unfair fees the type of apartment dictates where you go for help. If you live in a rent-controlled apartment you go to the Division of Housing and Community Renewal. If your apartment is not rent controlled you must contact the New York Attorney General’s Office.
At that point, you’ll be bringing your landlord to court, which means you’ll need help from an experienced real estate attorney.
If you are a landlord or real estate broker, complying with the law is the better part of valor. The law has put a squeeze on many landlords, especially small-to-medium-size owners who don’t make huge profits.
But the costs of defending yourself against sanctions aren’t worth it.