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Industry to sue over broker fee ban

 In response to guidance issued by New York State’s Department of State (DOS), major real estate trade associations and brokerage firms will file a lawsuit against the State next Monday.

The lawsuit alleges that the Department of State usurped its role by engaging in improper rulemaking rather than following the necessary and required legal procedures for implementing a new regulation.

Moreover, the association said, the Department of State’s decision to announce this new rule in such a way has created widespread disruption for property owners, rental agents, and prospective tenants themselves – resulting in losses for brokers and landlords alike.

The lawsuit will be filed on Monday, February 10.

JAMES WHELAN

“We are asking the court to recognize that the Department of State illegally overstepped its role in issuing its new Guidance on rental brokerage commissions,” said James Whelan, President of the Real Estate Board of New York. 

“The announcement of this new rule without warning has caused widespread confusion and havoc among dedicated real estate agents and the clients they serve. The sudden decision and the way it was made public was harmful to thousands of hardworking New Yorkers.”

“The New York State Association of Realtors (NYSAR) is deeply concerned with the regulation’s content and the manner in which it was developed and promulgated.  Real estate brokers provide valuable services to the consumer and the property owners and they should be fairly compensated. These regulations will severely and wrongly impact the incomes of hard-working real estate professionals,” said Jennifer Stevenson, President of the New York State Association of Realtors.

 “It is unconscionable that a serious disruption of the marketplace has occurred without any industry input or even proper review by the State Board of Real Estate.  We will use every resource available to us to fight against these unreasonable and punitive regulations.”

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