Bill Text: NY S05693 | 2013-2014 | General Assembly | Amended

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Bill Title: Relates to clarifying the permissibility of commissions, fees, or other compensation paid to real estate brokers.

Spectrum: Slight Partisan Bill (Republican 2-1)

Status: (Passed) 2014-12-17 - SIGNED CHAP.514 [S05693 Detail]

Download: New_York-2013-S05693-Amended.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        5693--B
                              2013-2014 Regular Sessions
                                   I N  S E N A T E
                                     June 5, 2013
                                      ___________
       Introduced  by  Sens. ZELDIN, VALESKY -- read twice and ordered printed,
         and when printed to be committed to  the  Committee  on  Judiciary  --
         recommitted  to  the  Committee on Judiciary in accordance with Senate
         Rule  6,  sec.  8  --  committee  discharged,  bill  amended,  ordered
         reprinted  as  amended  and recommitted to said committee -- committee
         discharged, bill amended, ordered reprinted as amended and recommitted
         to said committee
       AN ACT to amend the real property law, in  relation  to  clarifying  the
         permissibility of commissions, fees or other compensation paid to real
         estate brokers
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. Section 442 of the real property law, as amended by chapter
    2  45 of the laws of 1982, the opening paragraph as amended by chapter  316
    3  of  the  laws  of  2004, the second undesignated paragraph as amended by
    4  chapter 734 of the laws of 1986, is amended to read as follows:
    5    S 442. Splitting commissions. 1. No real estate broker shall  pay  any
    6  part  of  a fee, commission or other compensation received by the broker
    7  to any person for any service, help or aid  rendered  in  any  place  in
    8  which  this  article  is  applicable,  by  such  person to the broker in
    9  buying, selling, exchanging, leasing, renting or negotiating a loan upon
   10  any real estate including the resale of  a  condominium  OR  COOPERATIVE
   11  APARTMENT  unless  such a person be a duly licensed real estate salesman
   12  regularly associated with such broker or a  duly  licensed  real  estate
   13  broker  or a person regularly engaged in the real estate brokerage busi-
   14  ness in a state outside of New York; provided,  however,  that  notwith-
   15  standing  any  other  provision of this section, it shall be permissible
   16  for a real estate broker to pay any part of a fee, commission, or  other
   17  compensation  received  to  an  unlicensed  corporation or an unlicensed
   18  limited liability company  if  each  of  its  shareholders  or  members,
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD11341-08-4
       S. 5693--B                          2
    1  respectively,  is  associated as an individual with the broker as a duly
    2  licensed associate broker or salesman.
    3    2.  Furthermore,  notwithstanding any other provision of law, it shall
    4  be  permissible  for  a  broker  properly  registered  pursuant  to  the
    5  provisions  of  article  twenty-three-A  of the general business law who
    6  earns a commission on the original sale of a cooperative  or  homeowners
    7  association  interest in real estate, including condominium units to pay
    8  any part of a fee, commission or other compensation received for  bring-
    9  ing about such sale to a person whose [prinicipal] PRINCIPAL business is
   10  not  the  sale  or  offering  of  cooperatives or homeowners association
   11  interests in real property, including condominium units  in  this  state
   12  but  who  is either: (i) a real estate salesman duly licensed under this
   13  article who is regularly associated with such broker; (ii) a broker duly
   14  licensed under this article; or a person regularly engaged in  the  real
   15  estate brokerage business in a state outside of New York.
   16    Except  when  permitted  pursuant  to the foregoing provisions of this
   17  section no real estate broker shall pay or agree to pay any  part  of  a
   18  fee,  commission,  or other compensation received by the broker, or due,
   19  or to become due to the broker to any person, firm or corporation who or
   20  which is or is to be a party to  the  transaction  in  which  such  fee,
   21  commission  or  other compensation shall be or become due to the broker;
   22  PROVIDED, HOWEVER, THAT NOTHING IN THIS SECTION SHALL  PROHIBIT  A  REAL
   23  ESTATE  BROKER  FROM  OFFERING  ANY  PART OF A FEE, COMMISSION, OR OTHER
   24  COMPENSATION RECEIVED BY THE BROKER TO THE SELLER,  BUYER,  LANDLORD  OR
   25  TENANT WHO IS BUYING, SELLING, EXCHANGING, LEASING, RENTING OR NEGOTIAT-
   26  ING A LOAN UPON ANY REAL ESTATE INCLUDING THE RESALE OF A CONDOMINIUM OR
   27  COOPERATIVE  APARTMENT. SUCH FEE, COMMISSION, OR OTHER COMPENSATION MUST
   28  NOT BE MADE TO THE SELLER, BUYER, LANDLORD OR TENANT FOR PERFORMING  ANY
   29  ACTIVITY REQUIRING A LICENSE UNDER THIS ARTICLE.
   30    S 2. This act shall take effect immediately.