Shady broker turned out to be the landlord

Did you ever send him back a signed lease?
In any event, let him try to sue you for this. I doubt he wants his sketchiness a matter of public record in court filings.

The listing mentioned the broker fee and you saw it knowing that. You should stop complaining and pay up.

The transaction fell through so there was no closed deal. Also, the LL misrepresented that he was a "broker." He was not indeed a third-party broker so why should renter pay?

You don't owe anything.

CC, If the deal did not go through, there is no payment. I do not think the broker needed to tell that he is the landlord as well as long as brokerage commission was specified and he is a qualified broker.

4 hours ago 300_mercer says the OP should pay up. Now, he acknowledges there is no payment due.
His next sentence wasn't constructed as a proper English sentence, so I'll reserve comment.

bro·ker

noun
1.
a person who buys and sells goods or assets for others.

It's possible that he's qualified to act as a broker for others, but by definition one can't be a broker for oneself.

So Barbara Corcoran can not represent herself and collect buyer's broker commission?

Isn't this about a lack of disclosure? Why would the landlord/broker not be open and honest about the situation? It is because he was making a quick buck in a shady way. Sure, the OP would've paid a fee to another broker anyway but this character is not the kind of person to knowingly get into any kind of financial dealings with.

I do think broker has any obligation to disclose that he is the landlord as well. OP says that broker's fee was disclosed upfront. Why does OP care, if the broker is the landlord. Is it just jealousy or not wanting to pay the fee which was advertised when the OP saw the listing. In any case, OP has a choice to not rent the place, in which case, nothing is due.

Sorry, I meant I "DO NOT THINK".

ARTICLE 12-A REAL PROPERTY LAW
§440. Definitions
1. Whenever used in this article “real estate broker” means any person, firm, limited liability company or corporation, who, for another and for a fee, commission or other valuable consideration, lists for sale, sells, at auction or otherwise, exchanges, buys or rents, or offers or attempts to negotiate a sale, at auction or otherwise, exchange, purchase or rental of an estate or interest in real estate, or collects or offers or attempts to collect rent for the use of real estate, or negotiates or offers or attempts to negotiate, a loan secured...

ARTICLE 12-A REAL PROPERTY LAW
§440. Definitions
1. Whenever used in this article “real estate broker” means any person, firm, limited liability company or corporation, who, for another and for a fee, commission or other valuable consideration, lists for sale, sells, at auction or otherwise, exchanges, buys or rents, or offers or attempts to negotiate a sale, at auction or otherwise, exchange, purchase or rental of an estate or interest in real estate, or collects or offers or attempts to collect rent for the use of real estate, or negotiates or offers or attempts to negotiate, a loan secured

Jealousy?
Disclosure is important. The renter wants to and deserves to know if the landlord is honest.

Maybe not an "obligation" but if you are renting an apartment through a broker it does suggest that the broker is representing a landlord other than himself. Otherwise, what is the function of having a broker?

As a broker, the landlord, spent time on listing, showing the apartment, answering questions, and closing the deal. He could list this as no fee and potentially charge higher rent. I still do not understand why so many renters do not like to pay the broker a fee if it is specified in the listing. Otherwise, there are plenty of no fee listings.

I have tried to list an investment property as no fee listing and found that be too much work in showing and answering idiot enquiries, and ended up hiring a rental broker to deal with the hassle.

Lastly, I will let the brokers defend their fellow broker.

This isn't a gray area: Broker absolutely has an obligation to disclose that he is the owner as well.

ali r.
{downtown broker}

I'm not a lawyer but this language on the RGB website suggests it is illegal for an owner to demand a payment: Neither a managing agent nor the owner of a rental building can ask you for a fee in order to rent an apartment. Such a demand is "key money" and is illegal. You can report the managing agent/owner to the NYS Attorney General's Office (Manhattan) if you have some solid evidence. It is doubtful whether a verbal demand would be sufficient to get the AG's office to investigate unless you have corroborating witnesses.
http://www.nycrgb.org/html/guide/basics.html

This linked article also makes me wonder about the many brokers who also act as property manager, especially for international owners of luxury apartments in our great city.

Ali, Thank you for correcting me about the obligation to disclose that upfront. If the disclosure is upfront, can the broker/owner collect rental brokerage fee?

330 _mercer "As a broker, the landlord, spent time on listing, showing the apartment, answering questions, and closing the deal." But, a store owner spends a lot of time in her store waiting while customers browse and hoping they will buy. That doesn't give them the right to impose any kind of surcharge on the price of the goods to cover for her time and effort. I was recently selling some items on Craigslist and it took a certain amount of time and effort to do so - writing the listing, taking pictures, fielding emails and phone calls, being home to show the items to prospective buyers etc. That's what I expected to have to do to sell the items and that was what this landlord needed to to let his apartment. Why should the "cost" of that effort be passed on to a tenant? The landlord that the OP mentions was just trying to cash-in and take advantage of the situation.

It's perfectly fine if a landlord decides that they don't want the hassle of advertising and showing an apartment and prefers to let brokers be involved. They can hire (and pay for) their own broker to handle it, or work with tenant's brokers rather than tenants directly if that's easier.

The problem with the scenario in the original post was that the tenant was being asked to pay the broker fee. That would make the recipient of the fee *tenant's broker*, not the landlord's, and as such it would obviously be a complete conflict of interest for them to be the landlord at the same time.

bryant, When I hire a broker to rent out my apartment, I do not pay for him. The renter does even though the broker does not represent him. I only pay for the broker in the sense that I could have potentially charged higher rent without the broker fee.

well, 300 Mercer, now I'm trying to figure out where obligation to disclose comes from. I know I have it as a REBNY member, because I can see it in the Code of Ethics: (II.B.6. "Members shall not ... undertake to provide professional services concerning a property where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties.) That's pretty clear. So if Milo's firm is a REBNY member, there's room to speak to Milo's manager and/or the board itself and pursue the ethics violation.

But is it a legal obligation? Obligation to disclose that broker is owner in a sale is in the State Law 175.6 ("Broker's sale of property in which he owns an interest") but I don't see it stated as clearly referencing lease transactions. And, since I'm not an attorney, I'm not going to opine about Licensing Law. Maybe this is a good question for that New York Times column... or for the attorneys on this board ... come out and play wherever you are.

OP's original question, "do I owe a commission?" is a question for an attorney too, but it seems to me as a bystander, that rental brokers are compensated to procure apartments, and in this case, no apartment was procured, so it feels like a "no, you don't."

However, however, to return to the shadiness problem, it does seem like there's a missing element of disclosure here -- whether it rises to the level of "bad faith" I dunno.... but it might be interest to the OP to research the idea of a brokerage fee check being written to an individual -- if there's a brokerage company name, and yet a brokerage fee check is written to an individual, isn't that commingling funds? Again, I'm not a lawyer, but that might be a fun question to ask one.

30yrs, have you seen this happen before? what's your take?

ali r.
{downtown broker}

hire
verb
1.
employ (someone) for wages.
2.
obtain the temporary use of (something) for an agreed payment; rent.

If you're not paying, you're not hiring the broker. If the renter pays, then the renter is the one hiring the broker.

It's actually pretty simple, if you think of a broker a somebody who represents the person that pays them, and is for that reason contractually obligated advance their interests. It would be easy to think a broker of a broker as somebody that is entitled to charge a fee to either or both parties whenever a transaction occurs by virtue of their mere existence, but it's not actually correct.

>OP's original question, "do I owe a commission?" is a question for an attorney too, but it seems to me as a bystander, that rental brokers are compensated to procure apartments, and in this case, no apartment was procured, so it feels like a "no, you don't."

What do you mean "feels like"? The answer is an absolute, unequivocal "no", and the OP who was asking a legitimate question shouldn't be led to believe there is any daylight on this matter.

bryant, unfortunately, that is not how the rental brokers in NYC work.

Aside from the unethical play of the landlord, my understanding of the situation when one broker is representing both sides of the transaction is called dual agency. So the broker is representing BOTH the landlord and the tenant, with their primary fiduciary responsibility to the landlord.

Bryant, one of the first things that salespeople learn is that agency does not follow money. So a real estate salesperson doesn't always represent the person who pays them.

An easy example of this is a buyer's broker ... Keith or Noah might help a buyer find an apartment. They'd be paid by the seller ... but they're not representing the seller, they're representing their client (the purchaser).

Bryant, one of the first things that real estate salespeople learn is that agency does not follow money. So a salesperson DOESN'T always represent the person who pays them.

An easy example of this is a buyer's broker ... Keith or Noah might help a buyer find an apartment. They'd be paid by the seller ... but they're not representing the seller, they're representing their client (the purchaser).

If the renter does not have his own broker in this situation (i.e. 2 brokers--one for LL, one for renter), there is dual agency and that has to be disclosed.

As far as I know, it is absolutely illegal for a landlord to charge a brokerage fee when renting out his own property. I think one of the reasons this was brought into being is to prevent landlords of below market rent stabilized apartments from supplementing that low rent by charging huge up front fees or "key money".

In addition, the agent is never allowed to have commission checks written to them directly, but only the brokerage they work for.

30, Unless landlord is a broker.

A consumer may retain a real estate broker to find a suitable apartment. The state
licenses real estate brokers and salespersons. Brokers charge a commission for their
services which is usually a stated percentage of the first year's rent. The amount of
the commission is not set by law and should be negotiated between the parties. The
broker must assist the client in finding and obtaining an apartment before a
commission may be charged. The fee should not be paid until the client is offered a
lease signed by the landlord. Complaints against real estate brokers may be brought
to the attention of the New York Department of State. (Real Property Law, Article
12-A)

Apartment Referral Agencies

Businesses that charge a fee for providing information about the location and
availability of rental housing must be licensed by the state. The fees charged by these
firms may not exceed one month's rent. When the information the firms provide does
not result in a rental, the entire amount of any prepaid fee, less $15.00, must be
returned to the tenant. Criminal prosecution for violations of this law may be brought
by the Attorney General. (Real Property Law, Article 12-C)

"30, Unless landlord is a broker."
It depends what you mean by "a broker". Even if the agent has a Broker's License (as opposed to Salesperson's License) but is working as an Associate Broker under another Broker, they may not have checks cut directly to themselves.

>"30, Unless landlord is a broker."
It depends what you mean by "a broker". Even if the agent has a Broker's License (as opposed to Salesperson's License) but is working as an Associate Broker under another Broker, they may not have checks cut directly to themselves.

And if you can't have the checks written to you, you can't be the one who sues the non-check writer. If there was even a case anyway.

It is my understanding having been a broker for over 30 years, that there is an obligation to disclose that the person is an owner/broker. Also landlords and managing agents are not allowed to ask for a commission on property they represent. They can give the listing to licensed outside brokers who can collect a fee. In this case no fee can be collected since there is no signed lease

Hi KM, good to see you here. Love your current ad campaign. --ali

100 points for kmbroker for being straightforward and to the point, and not hiding behind some excuse that since she's "not a lawyer" she can only tell you what a "bystander" would "seem" to think.

"Well, I was going 90 miles per hour in a 55, but who am I to say that is speeding since I'm not a lawyer? I'm not even a regular bystander, I was recently unfrozen and I'm not used to your "auto mobiles" and your "radar"."

Go Managed FSBO and save tens of thousands and all the headaches listed above :) ..why are you sellers paying 6%?That's crazy!

http://www.hauseit.com/why-new-york-city-real-estate-commissions-high/

thank you Ali and fieldchester

Did you like my Unfrozen Caveman Lawyer impression? (Phil Hartman). Unfrozen Caveman Lawyer is my favorite of the Unfrozen Cavemen professionals: unfrozen caveman doctor - no thanks, leeches aren't my thing; unfrozen caveman real estate broker doesn't seem to be able to provide sufficient advice to his or her clients.

In defense of the people who disclaimed being a member of the legal profession, the original author is seeking
(free) legal advice and commenters are advising that the advice being given is based, not on a review and analysis of the relevant statuettes, regulations and case law, but on their own, often ignorant or reckless, perceptions of what the law should be. Sometimes those perceptions turn out to be right.