S T A T E O F N E W Y O R K ________________________________________________________________________ 5693--A 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 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, 19 respectively, is associated as an individual with the broker as a duly 20 licensed associate broker or salesman. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11341-04-4 S. 5693--A 2 1 2. Furthermore, notwithstanding any other provision of law, it shall 2 be permissible for a broker properly registered pursuant to the 3 provisions of article twenty-three-A of the general business law who 4 earns a commission on the original sale of a cooperative or homeowners 5 association interest in real estate, including condominium units to pay 6 any part of a fee, commission or other compensation received for bring- 7 ing about such sale to a person whose [prinicipal] PRINCIPAL business is 8 not the sale or offering of cooperatives or homeowners association 9 interests in real property, including condominium units in this state 10 but who is either: (i) a real estate salesman duly licensed under this 11 article who is regularly associated with such broker; (ii) a broker duly 12 licensed under this article; or a person regularly engaged in the real 13 estate brokerage business in a state outside of New York. 14 [Except when permitted pursuant to the foregoing provisions of this 15 section no real estate broker shall pay or agree to pay any part of a 16 fee, commission, or other compensation received by the broker, or due, 17 or to become due to the broker to any person, firm or corporation who or 18 which is or is to be a party to the transaction in which such fee, 19 commission or other compensation shall be or become due to the broker] 20 PROVIDED, HOWEVER, THAT NOTHING IN THIS SECTION SHALL PROHIBIT A REAL 21 ESTATE BROKER FROM OFFERING ANY PART OF A FEE, COMMISSION, OR OTHER 22 COMPENSATION RECEIVED BY THE BROKER TO THE SELLER, BUYER, LANDLORD OR 23 TENANT WHO IS BUYING, SELLING, EXCHANGING, LEASING, RENTING OR NEGOTIAT- 24 ING A LOAN UPON ANY REAL ESTATE INCLUDING THE RESALE OF A CONDOMINIUM OR 25 COOPERATIVE APARTMENT. SUCH FEE, COMMISSION, OR OTHER COMPENSATION MUST 26 NOT BE MADE TO THE SELLER, BUYER, LANDLORD OR TENANT FOR PERFORMING ANY 27 ACTIVITY REQUIRING A LICENSE UNDER THIS ARTICLE. 28 S 2. This act shall take effect immediately.