STATE OF NEW YORK ________________________________________________________________________ 9823 IN ASSEMBLY April 9, 2024 ___________ Introduced by M. of A. JACKSON -- read once and referred to the Commit- tee on Judiciary AN ACT to amend the real property law, in relation to prohibiting single-agent dual agency, requiring representation agreements, allow- ing buyers and tenants to negotiate broker fees, and prohibiting land- lords, lessors, sub-lessors, and grantors from requiring a tenant to pay brokers' fees as a condition of entering into a lease agreement The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph (a) of subdivision 1 of section 238-a of the real 2 property law, as amended by chapter 789 of the laws of 2021, is amended 3 to read as follows: 4 (a) Except in instances where statutes or regulations provide for a 5 payment, fee or charge, no landlord, lessor, sub-lessor or grantor may 6 demand any payment, fee, or charge for the processing, review or accept- 7 ance of an application, or demand any other payment, fee or charge 8 before or at the beginning of the tenancy, including but not limited to 9 broker's fees, except background checks and credit checks as provided by 10 paragraph (b) of this subdivision, provided that this subdivision shall 11 not apply to entrance fees charged by continuing care retirement commu- 12 nities licensed pursuant to article forty-six or forty-six-A of the 13 public health law, assisted living providers licensed pursuant to arti- 14 cle forty-six-B of the public health law, adult care facilities licensed 15 pursuant to article seven of the social services law, senior residential 16 communities that have submitted an offering plan to the attorney gener- 17 al, or not-for-profit independent retirement communities that offer 18 personal emergency response, housekeeping, transportation and meals to 19 their residents. Nothing in this paragraph shall prohibit a cooperative 20 housing corporation, other than a cooperative housing corporation 21 subject to the provisions of article two, article four, article five or 22 article eleven of the private housing finance law, from demanding from a 23 prospective tenant any payment, fee or charge which is necessary to 24 compensate a managing agent and/or transfer agent for the processing, 25 review or acceptance of such prospective tenant's application where such EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14134-01-4
A. 9823 2 1 prospective tenant would become a dwelling unit owner or shareholder of 2 such cooperative housing corporation. 3 § 2. The real property law is amended by adding a new section 443-b to 4 read as follows: 5 § 443-b. Agency relationships. 1. Application. The agency relation- 6 ships and requirements specified in this section or in rules or regu- 7 lations promulgated by the secretary of state shall supersede any agency 8 relationships and requirements between a licensee and a party to a resi- 9 dential real estate transaction which are based upon common law princi- 10 ples of agency if such common law principles are inconsistent with those 11 specified in this section. This section shall apply only to transactions 12 involving residential real property. 13 2. Definitions. For the purposes of this section, the following terms 14 shall have the following meanings: 15 (a) "Dual agent" shall mean an agent who is acting as a buyer's agent 16 and a seller's agent or a tenant's agent and a landlord's agent in the 17 same transaction. 18 (b) "Designated sales agent" shall mean a licensed real estate sales- 19 person or associate broker, working under the supervision of a real 20 estate broker, who has been assigned to represent a client when a 21 different client is also represented by such real estate broker in the 22 same transaction. 23 (c) "Representation agreement" shall mean a written contract between a 24 buyer or tenant of residential real property and a licensee, by which 25 the licensee has been authorized to act as an agent on behalf of the 26 buyer or tenant to locate residential real property, present an offer to 27 purchase or lease to the seller, seller's agent, landlord or landlord's 28 agent, and negotiates on behalf of the buyer or tenant. 29 3. Individual dual agency prohibited. No individual real estate 30 broker, associate real estate broker, or real estate salesperson shall 31 act as a buyer's agent and seller's agent in the same transaction, or 32 act as a tenant's agent and landlord's agent in the same transaction; 33 provided, however that a real estate broker may assign a separate real 34 estate salesperson or associate broker working under their supervision 35 to act as a designated sales agent to represent a client when a differ- 36 ent client is also represented by such real estate broker in the same 37 transaction. 38 4. Buyer or tenant representation agreements. (a) A representation 39 agreement shall: 40 (i) be written in clear and unambiguous language; 41 (ii) fully set forth all material terms, including the terms of licen- 42 see compensation; 43 (iii) have a definite duration or expiration date, including dates of 44 inception and expiration; and 45 (iv) be signed by all parties to the agreement. 46 (b) No real estate broker, associate real estate broker, or real 47 estate salesperson shall locate residential real property for a tenant 48 and/or negotiate on behalf of such tenant unless such real estate 49 broker, associate real estate broker, or real estate salesperson has 50 entered into a representation agreement to represent such tenant as such 51 tenant's agent. Such representation agreement must be entered into prior 52 to or immediately after a licensee shows any property to a tenant for 53 the first time. 54 (c) No real estate broker, associate real estate broker, or real 55 estate salesperson shall present an offer to purchase residential real 56 property to a seller or seller's agent and negotiate on behalf of the
A. 9823 3 1 buyer unless such real estate broker, associate real estate broker, or 2 real estate salesperson has entered into a written representation agree- 3 ment to represent such buyer as such buyer's agent. Such representation 4 agreement must be entered into no later than when the offer to purchase 5 is made to the seller or seller's agent. 6 5. Agent compensation from buyer or tenant. (a) No real estate broker, 7 associate real estate broker, or real estate salesperson shall collect 8 or demand compensation from a tenant in connection with a residential 9 real property transaction unless such real estate broker, associate real 10 estate broker, or real estate salesperson has entered into a signed 11 representation agreement with such tenant to act as such tenant's agent 12 in the transaction. 13 (b) No real estate broker, associate real estate broker, or real 14 estate salesperson shall collect or demand compensation from a buyer in 15 connection with a residential real property transaction unless such real 16 estate broker, associate real estate broker, or real estate salesperson 17 has entered into a signed representation agreement with such buyer to 18 act as such buyer's agent in the transaction. 19 6. No discrimination. No real estate broker, associate real estate 20 broker, real estate salesperson, or landlord may discriminate or take 21 adverse action against a potential tenant or buyer based on their repre- 22 sentation status. 23 7. Written permission or authorization to offer or advertise property 24 for sale or lease required. (a) No real estate broker, associate real 25 estate broker, or real estate salesperson shall offer or advertise resi- 26 dential real property for sale or lease unless such real estate broker, 27 associate real estate broker, or real estate salesperson has the written 28 permission or authorization of the owner of such residential real prop- 29 erty or such owner's authorized representative. 30 (b) If a real estate broker, associate real estate broker, or real 31 estate salesperson offers or advertises residential real property for 32 lease with the written permission or authorization of the owner of such 33 residential real property or the owner's authorized representative 34 pursuant to paragraph (a) of this subdivision and does not have a list- 35 ing agreement with such owner or such owner's authorized representative, 36 such real estate broker, associate real estate broker, or real estate 37 salesperson shall not enter into a representation agreement with and/or 38 be compensated by any tenant in connection with such residential real 39 property. 40 § 3. Paragraphs i, p, and q of subdivision 1, paragraph f of subdivi- 41 sion 3, and subdivisions 4 and 6 of section 443 of the real property 42 law, paragraph i of subdivision 1, subdivision 4 and subdivision 6 as 43 amended by chapter 549 of the laws of 2007, and paragraphs p and q of 44 subdivision 1 and paragraph f of subdivision 3 as added and paragraphs a 45 and b of subdivision 4 as amended by chapter 443 of the laws of 2010, 46 are amended to read as follows: 47 i. ["Dual agent"] "Representation agreement" means [an agent who is 48 acting as] a [buyer's agent] written contract between a buyer or tenant 49 of residential real property and a [seller's] licensee, by which such 50 licensee has been authorized to act as an agent on behalf of such buyer 51 or [a tenant's agent and a] tenant to locate residential real property, 52 present an offer to purchase or lease to the seller, such seller's 53 agent, the landlord, or such landlord's agent [in the same transaction], 54 and negotiates on behalf of such buyer or tenant. 55 p. ["Advance consent to dual agency" means written informed consent 56 signed by the seller/landlord or buyer/tenant that the listing agent
A. 9823 4 1 and/or buyer's agent may act as a dual agent for that seller/landlord 2 and a buyer/tenant for residential real property which is the subject of 3 a listing agreement. 4 q.] "Advance consent to dual agency with designated sales agents" 5 means written informed consent signed by the seller/landlord or 6 buyer/tenant that indicates the name of the agent appointed to represent 7 the seller/landlord or buyer/tenant as a designated sales agent for 8 residential real property which is the subject of a listing agreement. 9 f. A seller/landlord or buyer/tenant may provide advance informed 10 consent to [dual agency and] dual agency with designated sales agents by 11 indicating the same on the form set forth in subdivision four of this 12 section. 13 4. a. For buyer-seller transactions, the following shall be the 14 disclosure form: 15 NEW YORK STATE DISCLOSURE FORM 16 FOR 17 BUYER AND SELLER 18 THIS IS NOT A CONTRACT 19 New York state law requires real estate licensees who are acting as 20 agents of buyers or sellers of property to advise the potential buyers 21 or sellers with whom they work of the nature of their agency relation- 22 ship and the rights and obligations it creates. This disclosure will 23 help you to make informed choices about your relationship with the real 24 estate broker and its sales agents. 25 Throughout the transaction you may receive more than one disclosure 26 form. The law may require each agent assisting in the transaction to 27 present you with this disclosure form. A real estate agent is a person 28 qualified to advise about real estate. 29 If you need legal, tax or other advice, consult with a professional in 30 that field. 31 DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIPS 32 SELLER'S AGENT 33 A seller's agent is an agent who is engaged by a seller to represent 34 the seller's interests. The seller's agent does this by securing a buyer 35 for the seller's home at a price and on terms acceptable to the seller. 36 A seller's agent has, without limitation, the following fiduciary duties 37 to the seller: reasonable care, undivided loyalty, confidentiality, full 38 disclosure, obedience and duty to account. A seller's agent does not 39 represent the interests of the buyer. The obligations of a seller's 40 agent are also subject to any specific provisions set forth in an agree- 41 ment between the agent and the seller. In dealings with the buyer, a 42 seller's agent should (a) exercise reasonable skill and care in perform- 43 ance of the agent's duties; (b) deal honestly, fairly and in good faith; 44 and (c) disclose all facts known to the agent materially affecting the 45 value or desirability of property, except as otherwise provided by law. 46 BUYER'S AGENT 47 A buyer's agent is an agent who is engaged by a buyer to represent the 48 buyer's interests. The buyer's agent does this by negotiating the 49 purchase of a home at a price and on terms acceptable to the buyer. A 50 buyer's agent has, without limitation, the following fiduciary duties to 51 the buyer: reasonable care, undivided loyalty, confidentiality, full 52 disclosure, obedience and duty to account. A buyer's agent does not 53 represent the interests of the seller. The obligations of a buyer's 54 agent are also subject to any specific provisions set forth in [an] the 55 representation agreement between the agent and the buyer. Such represen- 56 tation agreement must be entered into prior to when the offer to
A. 9823 5 1 purchase is made to the seller or seller's agent. In dealings with the 2 seller, a buyer's agent should (a) exercise reasonable skill and care in 3 performance of the agent's duties; (b) deal honestly, fairly and in good 4 faith; and (c) disclose all facts known to the agent materially affect- 5 ing the buyer's ability and/or willingness to perform a contract to 6 acquire seller's property that are not inconsistent with the agent's 7 fiduciary duties to the buyer. 8 BROKER'S AGENTS 9 A broker's agent is an agent that cooperates or is engaged by a list- 10 ing agent or a buyer's agent (but does not work for the same firm as the 11 listing agent or buyer's agent) to assist the listing agent or buyer's 12 agent in locating a property to sell or buy, respectively, for the list- 13 ing agent's seller or the buyer agent's buyer. The broker's agent does 14 not have a direct relationship with the buyer or seller and the buyer or 15 seller can not provide instructions or direction directly to the 16 broker's agent. The buyer and the seller therefore do not have vicarious 17 liability for the acts of the broker's agent. The listing agent or 18 buyer's agent do provide direction and instruction to the broker's agent 19 and therefore the listing agent or buyer's agent will have liability for 20 the acts of the broker's agent. 21 [DUAL AGENT 22 A real estate broker may represent both the buyer and the seller if 23 both the buyer and seller give their informed consent in writing. In 24 such a dual agency situation, the agent will not be able to provide the 25 full range of fiduciary duties to the buyer and seller. The obligations 26 of an agent are also subject to any specific provisions set forth in an 27 agreement between the agent, and the buyer and seller. An agent acting 28 as a dual agent must explain carefully to both the buyer and seller that 29 the agent is acting for the other party as well. The agent should also 30 explain the possible effects of dual representation, including that by 31 consenting to the dual agency relationship the buyer and seller are 32 giving up their right to undivided loyalty. A buyer or seller should 33 carefully consider the possible consequences of a dual agency relation- 34 ship before agreeing to such representation. A seller or buyer may 35 provide advance informed consent to dual agency by indicating the same 36 on this form.] 37 DUAL AGENT 38 WITH 39 DESIGNATED SALES AGENTS 40 If the buyer and the seller provide their informed consent in writing, 41 the principals and the real estate broker who represents both parties as 42 a dual agent may designate a sales agent to represent the buyer and 43 another sales agent to represent the seller to negotiate the purchase 44 and sale of real estate. A sales agent works under the supervision of 45 the real estate broker. With the informed consent of the buyer and the 46 seller in writing, the designated sales agent for the buyer will func- 47 tion as the buyer's agent representing the interests of and advocating 48 on behalf of the buyer and the designated sales agent for the seller 49 will function as the seller's agent representing the interests of and 50 advocating on behalf of the seller in the negotiations between the buyer 51 and seller. A designated sales agent cannot provide the full range of 52 fiduciary duties to the buyer or seller. The designated sales agent must 53 explain that like the dual agent under whose supervision they function, 54 they cannot provide undivided loyalty. A buyer or seller should careful- 55 ly consider the possible consequences of a dual agency relationship with 56 designated sales agents before agreeing to such representation. A seller
A. 9823 6 1 or buyer may provide advance informed consent to dual agency with desig- 2 nated sales agents by indicating the same on this form. 3 This form was provided to me by ____________________ (print name of 4 licensee) of ____________________________ (print name of company, firm 5 or brokerage), a licensed real estate broker acting in the interest of 6 the: 7 ( ) Seller as a ( ) Buyer as a 8 (check relationship below) (check relationship below) 9 ( ) Seller's agent ( ) Buyer's agent 10 ( ) Broker's agent ( ) Broker's agent 11 [( ) Dual agent] ( ) Dual agent with designated sales agents 12 For advance informed consent to [either dual agency or] dual agency 13 with designated sales agents complete section below: 14 [( ) Advance informed consent dual agency.] 15 ( ) Advance informed consent to dual agency with designated sales 16 agents. 17 If dual agent with designated sales agents is indicated above: 18 ____________________ is appointed to represent the buyer; and 19 ____________________ is appointed to represent the seller in this 20 transaction. 21 (I)(We) acknowledge receipt of a copy of this disclosure form: 22 Signature of { } Buyer(s) and/or { } Seller(s): 23 ____________________ ____________________ 24 ____________________ ____________________ 25 Date:_______________ Date:_______________ 26 b. For landlord-tenant transactions, the following shall be the 27 disclosure form: 28 NEW YORK STATE DISCLOSURE FORM 29 FOR 30 LANDLORD AND TENANT 31 THIS IS NOT A CONTRACT 32 New York state law requires real estate licensees who are acting as 33 agents of landlords and tenants of real property to advise the potential 34 landlords and tenants with whom they work of the nature of their agency 35 relationship and the rights and obligations it creates. This disclosure 36 will help you to make informed choices about your relationship with the 37 real estate broker and its sales agents. 38 Throughout the transaction you may receive more than one disclosure 39 form. The law may require each agent assisting in the transaction to 40 present you with this disclosure form. A real estate agent is a person 41 qualified to advise about real estate. If you need legal, tax or other 42 advice, consult with a professional in that field. 43 DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIPS 44 LANDLORD'S AGENT 45 A landlord's agent is an agent who is engaged by a landlord to repre- 46 sent the landlord's interest. The landlord's agent does this by securing 47 a tenant for the landlord's apartment or house at a rent and on terms 48 acceptable to the landlord. A landlord's agent has, without limitation,
A. 9823 7 1 the following fiduciary duties to the landlord: reasonable care, undi- 2 vided loyalty, confidentiality, full disclosure, obedience and duty to 3 account. A landlord's agent does not represent the interests of the 4 tenant. The obligations of a landlord's agent are also subject to any 5 specific provisions set forth in an agreement between the agent and the 6 landlord. In dealings with the tenant, a landlord's agent should (a) 7 exercise reasonable skill and care in performance of the agent's duties; 8 (b) deal honestly, fairly and in good faith; and (c) disclose all facts 9 known to the agent materially affecting the value or desirability of 10 property, except as otherwise provided by law. 11 TENANT'S AGENT 12 A tenant's agent is an agent who is engaged by a tenant to represent 13 the tenant's interest. The tenant's agent does this by negotiating the 14 rental or lease of an apartment or house at a rent and on terms accepta- 15 ble to the tenant. A tenant's agent has, without limitation, the follow- 16 ing fiduciary duties to the tenant: reasonable care, undivided loyalty, 17 confidentiality, full disclosure, obedience and duty to account. A 18 tenant's agent does not represent the interest of the landlord. The 19 obligations of a tenant's agent are also subject to any specific 20 provisions set forth in [an] the representation agreement between the 21 agent and the tenant. Such representation agreement must be entered into 22 prior to or immediately after the tenant's agent shows any property to 23 the tenant for the first time. In dealings with the landlord, a tenant's 24 agent should (a) exercise reasonable skill and care in performance of 25 the agent's duties; (b) deal honestly, fairly and in good faith; and (c) 26 disclose all facts known to the tenant's ability and/or willingness to 27 perform a contract to rent or lease landlord's property that are not 28 inconsistent with the agent's fiduciary duties to the buyer. 29 BROKER'S AGENTS 30 A broker's agent is an agent that cooperates or is engaged by a list- 31 ing agent or a tenant's agent (but does not work for the same firm as 32 the listing agent or tenant's agent) to assist the listing agent or 33 tenant's agent in locating a property to rent or lease for the listing 34 agent's landlord or the tenant agent's tenant. The broker's agent does 35 not have a direct relationship with the tenant or landlord and the 36 tenant or landlord can not provide instructions or direction directly to 37 the broker's agent. The tenant and the landlord therefore do not have 38 vicarious liability for the acts of the broker's agent. The listing 39 agent or tenant's agent do provide direction and instruction to the 40 broker's agent and therefore the listing agent or tenant's agent will 41 have liability for the acts of the broker's agent. 42 [DUAL AGENT 43 A real estate broker may represent both the tenant and the landlord if 44 both the tenant and landlord give their informed consent in writing. In 45 such a dual agency situation, the agent will not be able to provide the 46 full range of fiduciary duties to the landlord and the tenant. The obli- 47 gations of an agent are also subject to any specific provisions set 48 forth in an agreement between the agent, and the tenant and landlord. An 49 agent acting as a dual agent must explain carefully to both the landlord 50 and tenant that the agent is acting for the other party as well. The
A. 9823 8 1 agent should also explain the possible effects of dual representation, 2 including that by consenting to the dual agency relationship the land- 3 lord and tenant are giving up their right to undivided loyalty. A land- 4 lord and tenant should carefully consider the possible consequences of a 5 dual agency relationship before agreeing to such representation. A 6 landlord or tenant may provide advance informed consent to dual agency 7 by indicating the same on this form.] 8 DUAL AGENT 9 WITH 10 DESIGNATED SALES AGENTS 11 If the tenant and the landlord provide their informed consent in writ- 12 ing, the principals and the real estate broker who represents both 13 parties as a dual agent may designate a sales agent to represent the 14 tenant and another sales agent to represent the landlord. A sales agent 15 works under the supervision of the real estate broker. With the informed 16 consent in writing of the tenant and the landlord, the designated sales 17 agent for the tenant will function as the tenant's agent representing 18 the interests of and advocating on behalf of the tenant and the desig- 19 nated sales agent for the landlord will function as the landlord's agent 20 representing the interests of and advocating on behalf of the landlord 21 in the negotiations between the tenant and the landlord. A designated 22 sales agent cannot provide the full range of fiduciary duties to the 23 landlord or tenant. The designated sales agent must explain that like 24 the dual agent under whose supervision they function, they cannot 25 provide undivided loyalty. A landlord or tenant should carefully consid- 26 er the possible consequences of a dual agency relationship with desig- 27 nated sales agents before agreeing to such representation. A landlord 28 or tenant may provide advance informed consent to dual agency with 29 designated sales agents by indicating the same on this form. 30 This form was provided to me by _____________________ (print name of 31 licensee) of __________________ (print name of company, firm or broker- 32 age), a licensed real estate broker acting in the interest of the: 33 ( ) Landlord as a ( ) Tenant as a 34 (check relationship below) (check relationship below) 35 ( ) Landlord's agent ( ) Tenant's agent 36 ( ) Broker's agent ( ) Broker's agent 37 [( ) Dual agent] ( ) Dual agent with designated sales agents 38 For advance informed consent to [either dual agency or] dual agency 39 with designated sales agents complete section below: 40 [( ) Advance informed consent dual agency.] 41 ( ) Advance informed consent to dual agency with designated sales 42 agents. 43 If dual agent with designated sales agents is indicated above: 44 _________________________ is appointed to represent the tenant; and 45 _________________________ is appointed to represent the landlord in 46 this transaction. 47 (I) (We) _____________________________________________ acknowledge 48 receipt of a copy of this disclosure form:
A. 9823 9 1 Signature of { } Landlord(s) and/or { } Tenant(s): 2 ______________________________________________________ 3 _______________________________________________________ 4 Date: _______________ Date: ________________ 5 6. [Nothing] Except as provided for in section four hundred forty- 6 three-b of this article, nothing in this section shall be construed to 7 limit or alter the application of the common law of agency with respect 8 to residential real estate transactions. 9 § 4. This act shall take effect on the one hundred eightieth day after 10 it shall have become a law.