CREL Unit 3

NY Agency Disclosure Requirements

A real estate broker shall make it clear for which party he is acting and he shall not receive compensation from more than one party except with the full knowledge and consent of the broker's client. (§ 175.7)

NY Real Property Law (RPL 443)

Requires brokers AND salespeople to disclose the nature and extent of their relationship on a precisely worded agency disclosure form.

First Substantive Contact

Triggers the need to present and explain the NYS Agency Disclosure form.

Types of Agency in NY

An agency relationship may exist between a broker and a client, a broker and salespersons, or two cooperating brokers.

Cooperating Broker Disclosure

Cooperating/selling brokers must inform the listing agent whether they are acting as a subagent of the seller, an agent of the buyer, or a broker's agent.

Dual Agency

A broker representing both parties in a single transaction, strictly forbidden in NY residential transactions unless both buyer and seller give informed written consent.

Single Agent

Represents only one party — buyer OR seller — in any one transaction.

Designated Agency

A broker technically acting as a dual agent may designate two different salespeople or associate brokers to separately represent each party.

Broker's Agent

A cooperating broker who is an agent of the listing broker but NOT a subagent of the seller.

Subagency & the MLS

MLS listings indicate which kind of agents the seller authorized the listing broker to cooperate with.

Buyer's Agent Compensation

May be paid by the buyer, the seller, or both; compensation does NOT determine agency.

Buyer-Agency Agreements in NY

Includes exclusive right to represent, exclusive agency, buyer-agency agreement, and open buyer-agency.

Listing Agreements in NY

Includes exclusive right to sell, exclusive agency, and open listing.

Net Listing

Illegal in NY; broker would keep money paid above the seller's asking price.

Multiple Listing Service (MLS)

An organization of brokers who agree to distribute and share listing information.

How Listings & Representation Agreements Are Terminated

Includes performance of the objective, expiration of specified time period, abandonment by the broker, mutual agreement to cancel, and others.

NY's statute of frauds

Listing agreements of 1 year or more must be in writing to be enforceable.

Recordkeeping

All signed disclosure forms must be kept by the broker for at least 3 years.

Property Condition Disclosure Statement

Required for sellers of 1-4 family homes in NY, consisting of 48 questions about the property.

Lead Paint Disclosure (Federal — HUD & EPA)

Applies to properties built before January 1, 1978; sellers AND landlords must disclose known lead paint.

NYC Lead Paint (Rental) Law

Covers buildings built before 1960 with 3 or more apartments.

Landlord responsibilities

Ask if a child under 6 lives in the home at lease signing/renewal/move-in.

Annual notice requirement

Landlords must send a notice once a year asking about children under 6.

Inspection requirement for children under 6

If a child under 6 is present, visually inspect once a year, fix peeling paint, use safe work practices, adjust painted doors/windows.

Tenant obligations

Tenants must answer all landlord notices.

Tenant notification requirement

Tenants must tell landlord if a child under 6 moves in.

Access for inspections

Tenants must let landlord in to inspect/repair.

Peeling paint notification

Tenants must notify landlord in writing immediately if they see peeling paint.

HPD inspection requirement

Tenants must call NYC Department of Housing Preservation and Development (HPD) — must inspect within 10-15 days.

Child testing requirement

Tenants must have children tested regularly.

Truth-in-heating disclosure

Seller of 1- or 2-family home must make available, on request, a 2-year history of heating and AC bills.

Sprinkler-system disclosure

Landlords must disclose whether rental has sprinklers.

Bedbug disclosure

Landlord/building manager must give prospective tenant a 1-year history of bedbug infestation.

Window guard disclosure

At lease signing, tenant discloses whether children under 11 will occupy unit and whether window guards are in place; landlord must install if not.

Smoke Detector Law effective date

Effective April 1, 2019 (General Business Law § 399-ccc).

Smoke detector sale prohibition

Solely battery-operated (replaceable battery like 9V) smoke detectors prohibited from sale.

New smoke detector requirements

New detectors must be hard-wired OR contain a 10-year non-removable/non-replaceable battery.

Existing rental compliance

Existing rentals/sales not subject — but once inventory is depleted, must replace with compliant device.

Stigmatized property disclosure

Murders, suicides, violent crime: NYS RPL § 443-a — NOT required to be disclosed unless the seller chooses to.

Ghost disclosure requirement

Ghosts/paranormal activity: NOT required to be disclosed UNLESS used in marketing.

Megan's Law disclosure

Licensee is NOT required to provide information about sex offenders/pedophiles in neighborhood.

Buyer agency

An agency relationship in which the broker or agent represents the interests of the buyer.

Exclusive agency listing

A listing agreement in which the broker is entitled to a commission if the property is sold during the listing term, unless the seller — acting alone — procures a buyer.

Exclusive right to represent

The most common form of buyer-agency agreement.

Exclusive-right-to-sell listing

A listing agreement in which the broker is entitled to a commission regardless of who sells the property.

Fiduciary relationship

A relationship of trust and confidence between trustee and beneficiary, attorney and client, or principal and agent.

Informed consent

Agreement based on full and fair disclosure of all facts a reasonable person would need to make a rational decision.

In-house sale

A sale in which one firm lists and sells the same property.

Listing broker

The broker with whom the seller enters into a valid listing agreement for sale or lease of real estate.

MLS (multiple listing service)

An organization formed by brokers to share listing information with other broker members, with offers of cooperation and compensation.

Open listing

Least restrictive type of listing; seller may employ any number of brokers and pays commission only to the broker who produces a ready, willing, and able buyer.

Seller agency

Real estate agency in which the broker represents the seller.

Selling broker

The broker who successfully finds a ready, willing, and able buyer.

Single agency

An agency relationship in which the agent represents a single party.

Subagency

An agency relationship in which the broker's sales associate assumes a fiduciary duty to the principal.

Undisclosed dual agency

Representation of both clients in the same transaction without full written disclosure and consent of all parties.

Vicarious liability

A liability that arises because of the relationship between the liable person and other parties.