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realtorprobl…, Real Estate Pro in New York, NY

A sponsoring broker no longer wants to pay one of his agent commissions? What can be done?

Asked by realtorproblems, New York, NY Mon Aug 6, 2012

Sponsoring broker does not have independent contractor agreement with any of his agents. He has previously paid this agent both sales and rental commissions, but now has withheld last two commissions and has threatened to not pay future commissions on deals that are getting ready to close. What can be done?

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If this is a big firm, you can first speak with a managing broker or a head of the department. The agent should be prepared to engage an attorney and should have all the proof that he has been working with these clients, such as agency disclosure documents with his name and signature, showsheets, application packages that this agent has prepared. Also, how was the commission split determined on the first place - is there a written document that specifies his/her commissions?
You can also contact REBNY and check with them if they have a procedure to file a complaint.
What are the broker's explanations on why he does not want to pay commission?

One would need more information to give you a more soid advice.
2 votes Thank Flag Link Mon Aug 6, 2012
I know someone who was in a similar situation. Here are steps that can be taken:

1. Gather up and make copies of all paperwork related to your deals. You are required to keep all paperwork for 3 years anyway, so this should be easy. You might also want to ask former customers/clients if they would send you a copy of their commission checks to prove the money was paid. For all new deals, get copies of *everything* including checks prior to handing them to broker. Make sure your name and signature are on everything possible.

2. Keep all emails related to broker and all deals.

3. Locate whatever paperwork you did sign with the sponsoring broker. You should have signed something; find it. If not, no worries for right now. Find some evidence you worked there, though, even a website page can be printed and saved.

4. Immediately find another broker who will accept you as an agent. Ask your current broker to end your affiliation on line so you can affiliate with another firm. Broker has 5 business days to comply; if they refuse to release your license, you can *call* DOS. Timing for this may be tricky since you have pending deals, but this is where you are heading.

5. You can file suit in small claims court in NYC online. It's cheap and easy to do.

6. Note: do not let your license lapse. Only licensed individuals can legally collect commissions.

Finally, if broker is a member of REBNY and you are, too, you might want to call them.
1 vote Thank Flag Link Tue Aug 7, 2012
Thank you Jolie. I would like to add that in NYC, small claims court is good for claims up to $5000. Claimants can read about how the court works online, there's great info there. It's also good to read up on how to collect after the court rules in your favor. For example, it helps to know where the defendant banks, and the account number, and you can all get that simply by copying commission checks before they are deposited. I personally scan all kinds of checks into my computer.
Flag Tue Aug 7, 2012
Great detailed answer Karla! Thanks! ( I hope I never need to do this.. LOL!)
Flag Tue Aug 7, 2012
Get a good attorney and switch brokers!
1 vote Thank Flag Link Mon Aug 6, 2012
You do not have to have an independent agreement in place, many offices do have one to avoid confusion about issues that could come up but it is not required. The agreement discloses the commission rate agreed, who pays for ads, if you are required to do floor duty and stuff like that. It is not the same as establishing association or affiliation with a real estate company. I am guessing you don't have one or you would know what it is.
1 vote Thank Flag Link Mon Aug 6, 2012
Find a good attorney immediately and let him/her advise you as to the best course of action. Transfer your license to a reputable agency.
1 vote Thank Flag Link Mon Aug 6, 2012
Thank you very much.
Flag Mon Aug 6, 2012
Contact the state departmen division of licensing services immediately, and hire a good attorney (perhaps you can band together to hire an attorney)
1 vote Thank Flag Link Mon Aug 6, 2012
do I have a case even without an independent contractor agreement?
Flag Mon Aug 6, 2012
Small claims court. This happened to me when I first started out. I took the B#$% to small claims court and WON. Including treble damages.
1 vote Thank Flag Link Mon Aug 6, 2012
Thank you. (almost forgot my manners)
Flag Mon Aug 6, 2012
So, you didn't have an independent contractor agreement? How long did the process take and cost you out of pocket? What forms of proof did the court ask for? I have everything: email, listing agreements, text messages, witnesses, etc.
Flag Mon Aug 6, 2012
No independent contractor agreement? Is there a verbal agreement, a handshake there must be something in writing? The whole sales force could not have joined without something in writing? How are commissions split? There must be a paper trail? See if your MLS service can give you any legal advise on this & take him to court. Why are you still there if he is not paying you your commissions? Why are the other agents still there? Join the office up the street & start legal procedures. Your license is attached to that office so this is proof that you work there at least. Also see if the DOS has any suggestions.
0 votes Thank Flag Link Tue Aug 7, 2012
As others have said: Document everything! Also was your licensed ever registered w/the NYS DOS licensing with this broker? Do you have a commission agreement or any kind of contract in place? I can not give legal advice but my understanding is that an independent contractor agreement is more to protect the broker from being required to pay a salary, withhold taxes etc. You definitely need to contact your local NAR and/or REBNY as appropriate and probably also the DOS. Probably an attorney as well. Is your license still with this broker?
0 votes Thank Flag Link Tue Aug 7, 2012
Brokers like this will not be in business very long. Their money will be drained from constantly hiring defense attorneys. I agree with the agent who mentioned showing the paper chain and showing procuring cause while under thier brokerage. Bring the broker to the board of realtors for not paying. That is clearly an ethics issue, and the brokerage will be disciplined, and you will prevail, I am sure.
0 votes Thank Flag Link Mon Aug 6, 2012
Unfortunately, Kimberly is wrong about this. It can take years for such firms to finally collapse or be shuttered. In the meantime, a lot of hardworking agents can lose their pay. Agents seeking a brokerage to affiliate with can research the brokerage in a variety of ways, starting with the DOS database regarding licenses. It's also possible to find court records online and to visit consumer ratings sites such as Yelp.
Flag Tue Aug 7, 2012
Hello there!

Just happened to me around April of this year, taking this former broker of mine to arbitration, provide all the proof of chain of events of all your deals, I'm sure justice will be on your side. Also hire an attorney if possible.

Good luck!
0 votes Thank Flag Link Mon Aug 6, 2012
The result will depend on the individual agreement between broker and agent. Once you understand what that is you can take it to the local board for possible arbitration.

0 votes Thank Flag Link Mon Aug 6, 2012
Hi Tim, thanks for clarifying. Now I don't have one, never in 9 years and three offices later.
0 votes Thank Flag Link Mon Aug 6, 2012
Excuse me, but Mr. Moore lives in North Carolina. You are licensed in New York State. In our state your independent contractor agreement must be renewed every 18 months (certain kinds of casual renewals are apparently OK). Contact New York State DOS via email for verification.
Flag Tue Aug 7, 2012
Not good all around. Do anyone else pick this up, "sponsoring broker does not have independent contractor agreement with any of his agents". How were the agents practicing real estate, they have to be sponsored by a broker?
0 votes Thank Flag Link Mon Aug 6, 2012
The broker legally sponsored us and has our license. However, none of us signed an independent contractor agreement.
Flag Mon Aug 6, 2012
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