Rental Basics in 10023>Question Details

Harris Fedri…, Renter in New York, NY

Is the role of a broker to only show an apartment to their client if somebody hires them to find an apartment to rent or is there a legal obligation?

Asked by Harris Fedrick, New York, NY Sat Feb 2, 2013

like when a broker is showing someone a house? The way I understand it for houses is that brokers are required to tell somebody whose buying if there's something wrong with the house (if they know about it.)

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Christine Gordon’s answer
Hi Harris,

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.

Looking forward,

Christine Gordon
Licensed Real Estate Salesperson
Cell: 917.881.2924
Fax: 347.328.9352
Apartment updates available at http://www.christinegordon.postlets.com
"Home is where the heart is."
3 votes Thank Flag Link Sun Feb 3, 2013
Hi Harris,

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.

Warm regars,
Armen

http://www.luxdwellings.com
2 votes Thank Flag Link Sat Feb 2, 2013
Thank you Armen. I didn't even know that anything such as a bedbug disclosure form even existed before now.
Flag Sun Feb 3, 2013
An agent attempts to locate suitable properties when approached by a client/customer based on the person(s) needs. If the agent is aware of any potential issues, the problem(s) should be disclosed; however it's the buyer's responsibility conduct any due diligence, including proper inspections.
1 vote Thank Flag Link Sun Feb 3, 2013
If you retain a real estate agent in New York State, the agent first needs to discuss with you the various kinds of representation and give you a choice of what type of representation you prefer. If you are a buyer or tenant, it would certainly be in your best interest to have the agent work with YOUR best interests in mind as opposed to the seller or landlord.

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. :)
1 vote Thank Flag Link Sun Feb 3, 2013
It depends on the agency relationship. If you are a customer then you are owed the typical care that anybody should receive. If you are a client then their is a fiduciary relationship established, there is a lot more owed to the client then. Always be clear up front what your relationship with your agent is, what you are signing, etc.

Chris
1 vote Thank Flag Link Sun Feb 3, 2013
Hi Harris,
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.

Regards,
Armen
0 votes Thank Flag Link Mon Mar 4, 2013
Whether you are renting/leasing or purchasing, all agents are required by law to have the New York State Agency Disclosure Form completed by the buyer/tenant/lessee or seller/landlord/lessor. It is important to know how you will be represented. This must take place before showing any property; it is “The Law”. This does not obligate you to any agent; this form cannot be altered. Please visit my website; I have a section on the home page about New York Agency Disclosures along with state forms and videos. Hope this helps!
Robin L. Ham
Web Reference: http://www.RGHRealty1.com
0 votes Thank Flag Link Mon Mar 4, 2013
In rental transactions, NO funds other than an application fee are to be paid prior to lease signing. The only funds paid to a broker is the broker fee for securing apt. No lease no apartment no broker fee.

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.
0 votes Thank Flag Link Tue Feb 19, 2013
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
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While it is possible the broker did not know about the bedbugs, he still must give your nephew back ALL of the money collected. That could include one month(s) rent, security deposit AND broker fee.

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.
0 votes Thank Flag Link Mon Feb 18, 2013
You might want to discuss this with an attorney. Basically the agent should have given you a disclosure telling you who they work for. Most probably it is for the Landlord. While it is possible that the agent didn't know about the bedbug situation, they should give you back your money once it was disclosed, and you didn't want to proceed.
0 votes Thank Flag Link Sun Feb 3, 2013
I guess I should have been more specific in my question. I am talking about the role of the broker for "renting" a client an apartment NOT buying one. This issue is with my Nephew because he was shown an apartment by a broker who he was paying a 15% broker fee to and when he got ready to sign the lease they tell him that there are bedbugs in the building but that they have an exterminator currently working to get rid of them. The broker claims he did not know about this but previously had told my Nephew that he put another client in the building a week prior (so how could he not know???)... My Nephew didn't sign the lease but now the broker doesn't want to give him his security deposit back and he doesn't trust the broker to find him something else. He's also out of the money he paid the movers because he had everything packed up on a truck but they had to bring everything back to his old apartment. Also he's had to pay another months rent in his old apartment as well as a penalty for not moving out before February 1st. Now that I think about it perhaps I asked this question in the wrong forum, I should be inquiring with an attorney.
0 votes Thank Flag Link Sun Feb 3, 2013
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