How are you? Sorry to hear about all the troubles that your nephew has gone through with trying to rent an apartment. Regardless of what the law says about fiduciary duties or other rules based on representation, there's always the moral obligation that we should all abide by. If your nephew feels that he's been wronged by the broker that he was working with then he definitely has the option of seeking legal advice however I would recommend approaching the broker directly to try and work something out that's reasonable. Litigation can be costly, time consuming and perhaps not even yield the outcome that you're looking for. Most real estate professionals don't want the headache of a lawsuit or having an unsatisfied customer on their hands so they would probably be open to discuss a resolution. In the interim, if your nephew still needs a place, please feel free to have him reach out to me because I wouldn't show him an apartment that I'm not willing to live in myself.
Licensed Real Estate Salesperson
Apartment updates available at http://www.christinegordon.postlets.com
"Home is where the heart is."
The law does not differenciate factual representations based on transaction type when it comes to residential real estate. (Note, RESIDENTIAL, as commercial is handled very differently). Fiduciary responsibility aside, as there may not be one in some transactions, licensees are required to disclose any material facts which may present a problem, which of course they have to have direct knowldedge of. New measures have also been put into place in NYC such as the bed bug disclosure.
If a seller or landlord is AWARE of a problem they should be disclosing it I the agent who should be disclosing it to you. However, you need to still perform a home inspection to learn about what needs to be done wih a home prior to signing contacts.
I hope that helps. :)
My gut tells me that there is a deeper rooted question behind this question. All proper disclosures will of course have to be made in respect to the representation. If the question implies to whether the broker is entitled to compensation by simply showing an apartment, the answer is NO in all cases. A broker will have to establish that he is the PROCURING CAUSE or to establish other roles in the transaction to justify receiving compensation.
It also goes back to the original agreement you have with the broker, which in all cases has to be clearly established. If you agree to pay a broker a "FINDER's FEE" if so agreed upon, to simply find you an apartment, then once the apartment is "FOUND" by the broker his role is complete.
A broker can receive a "CONSULTING FEE" if so agreed upon, which only requires the broker to give advice in a transaction.
If you hire a broker to "REPRESENT" you in a rental deal, then his compensation is contingent upon the success of the transaction. Which is more common, even if the agreement is only exclusive to one particular rental property.
The basis for all relationships are PROPERLY SET EXPECTATIONS, which is always a two way street. Most rental agents don't get enough face time with the rental clients, leaving little time to establish proper rapport and to establish expectations. My advise would be to do so beforehand in all cases.
Robin L. Ham
Furthermore, security deposit has nothing to with with the broker. Security deposit is for landlord to cover damages from tenant. If tenant never moved in or signed lease there is no security deposit.
Unfortunately bed bugs is a major problem in NYC. They have been found in some of Manhattan's finest luxury buildings. I have been to several closings recently where it was disclosed that there were bed bugs. A good building that is well managed will take care of it.
Even though he rented to another tenant the week before, its quite possible the bugs didn't make their presence known. If it is known by the owner/manager that bedbugs are/were present, there is a disclosure form that is required to be given to the tenant by the landlord and presented to the tenant by the agent.
The only money that perhaps may not be refunded is the application/registration or credit fee. That depends on the real estate agent's office.
There is no way an agent/broker can keep a broker fee and/or security deposit for an apartment he/she did not sign a lease for.
Talk to the sales agent/broker one last time. If that doesn't work, speak to his boss or the head broker in the company. If that doesn't work and depending on the amount, take him to small claims court. That won't require expensive lawyer fees.
As hard as a sales agent/broker works and as difficult as it may be in these tough times to give money back when a rental doesn't work out, you have to! It is a sales agent/broker's fiduciary responsibility.