senate Bill S5693B

Signed By Governor
2013-2014 Legislative Session

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

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Sponsored By

Archive: Last Bill Status - Signed by Governor


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Dec 17, 2014 signed chap.514
Dec 05, 2014 delivered to governor
Jun 16, 2014 returned to senate
passed assembly
ordered to third reading rules cal.266
substituted for a7979b
Jun 12, 2014 referred to codes
delivered to assembly
passed senate
Jun 11, 2014 ordered to third reading cal.1334
committee discharged and committed to rules
Jun 04, 2014 print number 5693b
amend and recommit to judiciary
May 29, 2014 print number 5693a
amend and recommit to judiciary
Jan 08, 2014 referred to judiciary
returned to senate
died in assembly
Jun 20, 2013 referred to judiciary
delivered to assembly
passed senate
ordered to third reading cal.1538
committee discharged and committed to rules
Jun 05, 2013 referred to judiciary

Votes

view votes

Jun 11, 2014 - Rules committee Vote

S5693B
23
0
committee
23
Aye
0
Nay
0
Aye with Reservations
0
Absent
2
Excused
0
Abstained
show Rules committee vote details

Jun 20, 2013 - Rules committee Vote

S5693
24
0
committee
24
Aye
0
Nay
1
Aye with Reservations
0
Absent
0
Excused
0
Abstained
show committee vote details

Bill Amendments

Original
A
B (Active)
Original
A
B (Active)

Co-Sponsors

S5693 - Bill Details

See Assembly Version of this Bill:
A7979B
Law Section:
Real Property Law
Laws Affected:
Amd §442, RP L

S5693 - Bill Texts

view summary

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

view sponsor memo
BILL NUMBER:S5693

TITLE OF BILL: 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

PURPOSE OR GENERAL IDEA OF BILL: The bill amends § 442 of the Real
Property Law titled "Splitting Commissions," to state that nothing
shall prohibit a broker from offering any part of a fee, commission,
or other compensation received by the broker to the seller, buyer,
landlord or tenant as an incentive for using the licensed services of
that broker.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1. amends Section 442 of the real property law, to read:
Nothing in this section shall prohibit a real estate broker from
offering any part of a fee, commission, or other compensation received
by the broker to the seller, buyer, landlord or tenant who is buying,
selling, exchanging, leasing, renting or negotiating a loan upon any
real estate including the resale of a condominium or cooperative
apartment. Such fee, commission, or other compensation must not be
made to the seller, buyer, landlord or tenant for performing any
activity requiring a license under this Article.

Section 2. This act shall take effect immediately.

JUSTIFICATION: Section 442 of the Real Property Law prohibits a real
estate broker from offering to pay any part of the broker's commission
to any party to a real estate transaction if the purpose of the
payment is to compensate an unlicensed party for providing services
that would otherwise require a real estate broker's license.
Generally speaking, section 442 was intended to discourage unlicensed
activity. Section 442 does not, however, prohibit a real estate broker
from offering cash, services, or products to attract new clients and
customers.

Due to the confusing language of Sec. 442, there is uncertainty in the
real estate community regarding the offering of rebates and other
incentives to consumers. The Department of State and the Attorney
General's office have both agreed in various opinions and decisions,
the ability of brokers to offer buyers and sellers, landlords and
tenants, rebates and other monetary incentives for using their
licensed real estate broker services.

This legislation amends § 442 of the Real Property Law to clarify the
statutory language to reflect the decisions of the Department of State
and the Attorney General that nothing shall prohibit a broker from
offering any part of a fee, commission, or other compensation received
by the broker to the seller, buyer, landlord or tenant as an incentive
for using the licensed services of that broker.

Since Broker rebates/incentives are already legal in New York State,
this legislation simply amends the existing statutory language to
clarify and codify the practice.

PRIOR LEGISLATIVE HISTORY: New bill.


FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediately.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5693

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              June 5, 2013
                               ___________

Introduced  by  Sen.  ZELDIN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Judiciary

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:

  Section 1. Section 442 of the real property law, as amended by chapter
45 of the laws of 1982, the opening paragraph as amended by chapter  316
of  the  laws  of  2004, the second undesignated paragraph as amended by
chapter 734 of the laws of 1986, is amended to read as follows:
  S 442. Splitting commissions. 1. No real estate broker shall  pay  any
part  of  a fee, commission or other compensation received by the broker
to any person for any service, help or aid  rendered  in  any  place  in
which  this  article  is  applicable,  by  such  person to the broker in
buying, selling, exchanging, leasing, renting or negotiating a loan upon
any real estate including the resale of  a  condominium  OR  COOPERATIVE
APARTMENT  unless  such a person be a duly licensed real estate salesman
regularly associated with such broker or a  duly  licensed  real  estate
broker  or a person regularly engaged in the real estate brokerage busi-
ness in a state outside of New York; provided,  however,  that  notwith-
standing  any  other  provision of this section, it shall be permissible
for a real estate broker to pay any part of a fee, commission, or  other
compensation  received  to  an  unlicensed  corporation or an unlicensed
limited liability company  if  each  of  its  shareholders  or  members,
respectively,  is  associated as an individual with the broker as a duly
licensed associate broker or salesman.
  2. Furthermore, notwithstanding any other provision of law,  it  shall
be  permissible  for  a  broker  properly  registered  pursuant  to  the
provisions of article twenty-three-A of the  general  business  law  who
earns  a  commission on the original sale of a cooperative or homeowners

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11341-02-3

S. 5693                             2

association interest in real estate, including condominium units to  pay
any  part of a fee, commission or other compensation received for bring-
ing about such sale to a person whose [prinicipal] PRINCIPAL business is
not  the  sale  or  offering  of  cooperatives or homeowners association
interests in real property, including condominium units  in  this  state
but  who  is either: (i) a real estate salesman duly licensed under this
article who is regularly associated with such broker; (ii) a broker duly
licensed under this article; or a person regularly engaged in  the  real
estate brokerage business in a state outside of New York.
  [Except  when  permitted  pursuant to the foregoing provisions of this
section no real estate broker shall pay or agree to pay any  part  of  a
fee,  commission,  or other compensation received by the broker, or due,
or to become due to the broker to any person, firm or corporation who or
which is or is to be a party to  the  transaction  in  which  such  fee,
commission or other compensation shall be or become due to the broker.]
  3.  NOTHING  IN  THIS SECTION SHALL PROHIBIT A REAL ESTATE BROKER FROM
OFFERING ANY PART OF A FEE, COMMISSION, OR OTHER  COMPENSATION  RECEIVED
BY  THE  BROKER  TO THE SELLER, BUYER, LANDLORD OR TENANT WHO IS BUYING,
SELLING, EXCHANGING, LEASING, RENTING OR NEGOTIATING  A  LOAN  UPON  ANY
REAL  ESTATE INCLUDING THE RESALE OF A CONDOMINIUM OR COOPERATIVE APART-
MENT. SUCH FEE, COMMISSION, OR OTHER COMPENSATION MUST NOT  BE  MADE  TO
THE  SELLER,  BUYER,  LANDLORD  OR  TENANT  FOR  PERFORMING ANY ACTIVITY
REQUIRING A LICENSE UNDER THIS ARTICLE.
  S 2. This act shall take effect immediately.

Co-Sponsors

S5693A - Bill Details

See Assembly Version of this Bill:
A7979B
Law Section:
Real Property Law
Laws Affected:
Amd §442, RP L

S5693A - Bill Texts

view summary

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

view sponsor memo
BILL NUMBER:S5693A

TITLE OF BILL: 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

PURPOSE OR GENERAL IDEA OF BILL:

The bill amends § 442 of the Real Property Law titled "Splitting
Commissions," to state that nothing shall prohibit a broker from
offering any part of a fee, commission, or other compensation received
by the broker to the seller, buyer, landlord or tenant as an incentive
for using the licensed services of that broker.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends section 442 of the real property law to include
commissions earned in the sale or lease of cooperative apartments to
the prohibition against splitting commission with a non-agent.

Section 2 amends section 442 of the real property law to clarify that
nothing in this section shall prohibit a real estate broker from
offering any part of a fee, commission, or other compensation received
by the broker to the seller, buyer, landlord or tenant who is buying,
selling, exchanging, leasing, renting or negotiating a loan upon any
real estate including the resale of a condominium or cooperative
apartment. Such fee, commission, or other compensation must not be
made to the seller, buyer, landlord or tenant for performing any
activity requiring a license under this Article.

Section 2. This act shall take effect immediately.

JUSTIFICATION:

Section 442 of the Real Property Law prohibits a real estate broker
from offering to pay any part of the broker's commission to any party
to a real estate transaction if the purpose of the payment is to
compensate an unlicensed party for providing services that would
otherwise require a real estate broker's license. Generally speaking,
section 442 was intended to discourage unlicensed activity. Section
442 does not, however, prohibit a real estate broker from offering
cash, services, or products to attract new clients and customers.

Due to the confusing language of Sec. 442, there is uncertainty in the
real estate community regarding the offering of rebates and other
incentives to consumers. The Department of State and the Attorney
General's office have both agreed in various opinions and decisions,
the ability of brokers to offer buyers and sellers, landlords and
tenants, rebates and other monetary incentives for using their
licensed real estate broker services.

This legislation amends § 442 of the Real Property Law to clarify the
statutory language to reflect the decisions of the Department of State
and the Attorney General that nothing shall prohibit a broker from
offering any part of a fee, commission, or other compensation received
by the broker to the seller, buyer, landlord or tenant as an incentive
for using the licensed services of that broker.


Since Broker rebates/incentives are already legal in New York State,
this legislation simply amends the existing statutory language to
clarify and codify the practice.

PRIOR LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately.

view full text
download pdf
                    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:

  Section 1. Section 442 of the real property law, as amended by chapter
45  of the laws of 1982, the opening paragraph as amended by chapter 316
of the laws of 2004, the second undesignated  paragraph  as  amended  by
chapter 734 of the laws of 1986, is amended to read as follows:
  S  442.  Splitting commissions. 1. No real estate broker shall pay any
part of a fee, commission or other compensation received by  the  broker
to  any  person  for  any  service, help or aid rendered in any place in
which this article is applicable,  by  such  person  to  the  broker  in
buying, selling, exchanging, leasing, renting or negotiating a loan upon
any  real  estate  including  the resale of a condominium OR COOPERATIVE
APARTMENT unless such a person be a duly licensed real  estate  salesman
regularly  associated  with  such  broker or a duly licensed real estate
broker or a person regularly engaged in the real estate brokerage  busi-
ness  in  a  state outside of New York; provided, however, that notwith-
standing any other provision of this section, it  shall  be  permissible
for  a real estate broker to pay any part of a fee, commission, or other
compensation received to an  unlicensed  corporation  or  an  unlicensed
limited  liability  company  if  each  of  its  shareholders or members,
respectively, is associated as an individual with the broker as  a  duly
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

  2.  Furthermore,  notwithstanding any other provision of law, it shall
be  permissible  for  a  broker  properly  registered  pursuant  to  the
provisions  of  article  twenty-three-A  of the general business law who
earns a commission on the original sale of a cooperative  or  homeowners
association  interest in real estate, including condominium units to pay
any part of a fee, commission or other compensation received for  bring-
ing about such sale to a person whose [prinicipal] PRINCIPAL business is
not  the  sale  or  offering  of  cooperatives or homeowners association
interests in real property, including condominium units  in  this  state
but  who  is either: (i) a real estate salesman duly licensed under this
article who is regularly associated with such broker; (ii) a broker duly
licensed under this article; or a person regularly engaged in  the  real
estate brokerage business in a state outside of New York.
  [Except  when  permitted  pursuant to the foregoing provisions of this
section no real estate broker shall pay or agree to pay any  part  of  a
fee,  commission,  or other compensation received by the broker, or due,
or to become due to the broker to any person, firm or corporation who or
which is or is to be a party to  the  transaction  in  which  such  fee,
commission  or  other compensation shall be or become due to the broker]
PROVIDED, HOWEVER, THAT NOTHING IN THIS SECTION SHALL  PROHIBIT  A  REAL
ESTATE  BROKER  FROM  OFFERING  ANY  PART OF A FEE, COMMISSION, OR OTHER
COMPENSATION RECEIVED BY THE BROKER TO THE SELLER,  BUYER,  LANDLORD  OR
TENANT WHO IS BUYING, SELLING, EXCHANGING, LEASING, RENTING OR NEGOTIAT-
ING A LOAN UPON ANY REAL ESTATE INCLUDING THE RESALE OF A CONDOMINIUM OR
COOPERATIVE  APARTMENT. SUCH FEE, COMMISSION, OR OTHER COMPENSATION MUST
NOT BE MADE TO THE SELLER, BUYER, LANDLORD OR TENANT FOR PERFORMING  ANY
ACTIVITY REQUIRING A LICENSE UNDER THIS ARTICLE.
  S 2. This act shall take effect immediately.

Co-Sponsors

S5693B (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A7979B
Law Section:
Real Property Law
Laws Affected:
Amd §442, RP L

S5693B (ACTIVE) - Bill Texts

view summary

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

view sponsor memo
BILL NUMBER:S5693B

TITLE OF BILL: 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

PURPOSE OR GENERAL IDEA OF BILL:

The bill amends § 442 of the Real Property Law titled "Splitting
Commissions," to state that nothing shall prohibit a broker from
offering any part of a fee, commission, or other compensation received
by the broker to the seller, buyer, landlord or tenant as an incentive
for using the licensed services of that broker.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends section 442 of the real property law to include
commissions earned in the sale or lease of cooperative apartments to
the prohibition against splitting commission with a non-agent.
Subdivision 2 clarifies that nothing in this section shall prohibit a
real estate broker from offering any part of a fee, commission, or
other compensation received by the broker to the seller, buyer,
landlord or tenant who is buying, selling, exchanging, leasing,
renting or negotiating a loan upon any real estate including the
resale of a condominium or cooperative apartment. Such fee,
commission, or other compensation must not be made to the seller,
buyer, landlord or tenant for performing any activity requiring a
license under this Article.

Section 2 provides that his act shall take effect immediately.

JUSTIFICATION:

Section 442 of the Real Property Law prohibits a real estate broker
from offering to pay any part of the broker's commission to any party
to a real estate transaction if the purpose of the payment is to
compensate an unlicensed party for providing services that would
otherwise require a real estate broker's license. Generally speaking,
section 442 was intended to discourage unlicensed activity. Section
442 does not, however, prohibit a real estate broker from offering
cash, services, or products to attract new clients and customers.

Due to the confusing language of Sec. 442, there is uncertainty in the
real estate community regarding the offering of rebates and other
incentives to consumers. The Department of State and the Attorney
General's office have both agreed in various opinions and decisions,
the ability of brokers to offer buyers and sellers, landlords and
tenants, rebates and other monetary incentives for using their
licensed real estate broker services.

This legislation amends § 442 of the Real Property Law to clarify the
statutory language to reflect the decisions of the Department of State
and the Attorney General that nothing shall prohibit a broker from
offering any part of a fee, commission, or other compensation received
by the broker to the seller, buyer, landlord or tenant as an incentive
for using the licensed services of that broker. Since Broker
rebates/incentives are already legal in New York State, this


legislation simply amends the existing statutory language to clarify
and codify the practice.

PRIOR LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately.

view full text
download pdf
                    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:

  Section 1. Section 442 of the real property law, as amended by chapter
45 of the laws of 1982, the opening paragraph as amended by chapter  316
of  the  laws  of  2004, the second undesignated paragraph as amended by
chapter 734 of the laws of 1986, is amended to read as follows:
  S 442. Splitting commissions. 1. No real estate broker shall  pay  any
part  of  a fee, commission or other compensation received by the broker
to any person for any service, help or aid  rendered  in  any  place  in
which  this  article  is  applicable,  by  such  person to the broker in
buying, selling, exchanging, leasing, renting or negotiating a loan upon
any real estate including the resale of  a  condominium  OR  COOPERATIVE
APARTMENT  unless  such a person be a duly licensed real estate salesman
regularly associated with such broker or a  duly  licensed  real  estate
broker  or a person regularly engaged in the real estate brokerage busi-
ness in a state outside of New York; provided,  however,  that  notwith-
standing  any  other  provision of this section, it shall be permissible
for a real estate broker to pay any part of a fee, commission, or  other
compensation  received  to  an  unlicensed  corporation or an unlicensed
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

respectively,  is  associated as an individual with the broker as a duly
licensed associate broker or salesman.
  2.  Furthermore,  notwithstanding any other provision of law, it shall
be  permissible  for  a  broker  properly  registered  pursuant  to  the
provisions  of  article  twenty-three-A  of the general business law who
earns a commission on the original sale of a cooperative  or  homeowners
association  interest in real estate, including condominium units to pay
any part of a fee, commission or other compensation received for  bring-
ing about such sale to a person whose [prinicipal] PRINCIPAL business is
not  the  sale  or  offering  of  cooperatives or homeowners association
interests in real property, including condominium units  in  this  state
but  who  is either: (i) a real estate salesman duly licensed under this
article who is regularly associated with such broker; (ii) a broker duly
licensed under this article; or a person regularly engaged in  the  real
estate brokerage business in a state outside of New York.
  Except  when  permitted  pursuant  to the foregoing provisions of this
section no real estate broker shall pay or agree to pay any  part  of  a
fee,  commission,  or other compensation received by the broker, or due,
or to become due to the broker to any person, firm or corporation who or
which is or is to be a party to  the  transaction  in  which  such  fee,
commission  or  other compensation shall be or become due to the broker;
PROVIDED, HOWEVER, THAT NOTHING IN THIS SECTION SHALL  PROHIBIT  A  REAL
ESTATE  BROKER  FROM  OFFERING  ANY  PART OF A FEE, COMMISSION, OR OTHER
COMPENSATION RECEIVED BY THE BROKER TO THE SELLER,  BUYER,  LANDLORD  OR
TENANT WHO IS BUYING, SELLING, EXCHANGING, LEASING, RENTING OR NEGOTIAT-
ING A LOAN UPON ANY REAL ESTATE INCLUDING THE RESALE OF A CONDOMINIUM OR
COOPERATIVE  APARTMENT. SUCH FEE, COMMISSION, OR OTHER COMPENSATION MUST
NOT BE MADE TO THE SELLER, BUYER, LANDLORD OR TENANT FOR PERFORMING  ANY
ACTIVITY REQUIRING A LICENSE UNDER THIS ARTICLE.
  S 2. This act shall take effect immediately.

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