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Paulette, Renter in Roosevelt, NY

My husband and I signed a rent to own lease. Nowhere did the listing agent told us we have to pay his fee until we went to sign the contract. Since

Asked by Paulette, Roosevelt, NY Mon Jul 19, 2010

we did not hire him, are we to pay him his fees or is that the responsibility of the owner?

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That really all depends on your paperwork. What YOU agreed to. I can describe how it generally works, but recognize that what you signed may be completely different.

Further, I'm not a lawyer, so this isn't legal advice.

First, usually the seller (or the landlord) pays the commission. (If you signed something committing yourself as the tenant-buyer to pay, then you're responsible.) You had no relationship to the listing agent unless the agent was acting as a dual agent--representing both you and the landlord/seller. If you had your own Realtor, then the listing agent has no claim to your money.

The next question is whether you're being expected to pay the fee for leasing the property, or the fee for purchasing. In a lease option, there are two different documents and functions. First, there's a lease. And the commission is usually paid by the landlord. A typical arrangement (but it's all negotiable) might be for the landlord to pay the equivalent of one month's rent as the commission. So let's say the rent is $1,000. The landlord might pay $1,000 in commission, which could be split up to 4 ways: Listing agent, listing agent's broker, buyer's/tenant's agent, and buyer's/tenant's agent's broker.

Usually, in a lease-option or lease-purchase, the commission for the sale isn't collected until the sale occurs. There are ways that the owner can compensate the listing agent for part or all of the commission, but, more generally, the commission is actually paid when the sale occurs. Under a rent-to-own arrangement, the sale hasn't occurred yet so (unless the seller promised his listing agent some of the commission up front) really neither you nor the seller at this point should be liable for a commission on a sale that may not occur. Again, though, it all depends on the documents you signed.

Hopefully, you have your own agent. Your agent should be able to look at what you've signed and advise you. If not, contact a lawyer.

But, under most rent-to-own arrangements, the tenant-buyer would not be expected to provide a fee to the listing agent.

One other possibility, though: Are you sure the money you're being asked to pay is the listing agent's fee? Often, in a rent-to-own, there's an up-front option fee that the tenant-buyer (you) would give to the seller. It's typically non-refundable. What you're paying for is the right to purchase the property at a date in the future. If what you're being asked for is the option fee, then that should have been disclosed to you earlier when you were negotiating the rent and the purchase price. And understand: The option fee is NOT a downpayment. And usually the option fee is NOT refundable if you later decide not to buy, or are unable to do so.

So, check your paperwork. Check with your agent. And, if necessary, check with a lawyer.

Hope that helps.
1 vote Thank Flag Link Mon Jul 19, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Did you always live in NY? This can be confusing, In NY generally, and certainly in Roosevelt, the tenant pays the fees; in other states neighboring states such as NJ and PA, the landlord pays the fee.
0 votes Thank Flag Link Wed Jul 28, 2010
Paullette usually the landlord pays the listing agents fee of it was the landlord that hired them to rent the property. Unless you signed a form hiring that agent, you should not have to pay them. this is something the agent should have disclosed immediately when price was discussed.

If you really want the place, you should at least use teh first frr meeting with an attorney toget some direction or at least search NY landlord tenant law on google and see how much they can collect upon signing a lease.

Now i know in some areas it is teh buyers that pay the leasing commissions but even so, it is disclosed, it can not be a hidden fee. You can alsways ask teh agent what the real estate commission thinks of their practice.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Jul 19, 2010
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