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Broker suing over non payment of broker fees

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Broker suing over non payment of broker fees

Postby Achow8 » Mon Jan 18, 2016 11:30 pm

I responded to an ad on streeteasy.com to see a potential apartment for rent by an existing occupant/roommate. The ad did not mention a broker's fee. Also I never signed any agreement with the broker. The broker did not even show me the apartment; he merely provided me with the building address, unit and tenant's name. In addition, the building is a no fee building and I was advised by property management that it is inappropriate for this broker to charge a fee. Subsequent to agreeing with my roommate to move in, the broker then notified that I owed him one month's broker fee. I also later found out (and perhaps not so relevant with respect to the broker) that the living arrangement was illegal as my name was not only not on the lease but my roommate never registered me as a co-tenant. After living there for 3.5 months I moved out and received a notice that the broker is suing me for non-payment of the broker fee. Do you think he is legally entitled to the fee? Who has a better chance of winning the case given the above facts? Any help would be much appreciated!
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Re: Broker suing over non payment of broker fees

Postby TenantNet » Tue Jan 19, 2016 12:05 am

I doesn't sound kosher. The first place I would call is the NYS Attorney General's office.

Have you actually been served with court papers?
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Re: Broker suing over non payment of broker fees

Postby Achow8 » Tue Jan 19, 2016 12:25 am

Yes, I have been served with court papers.
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Re: Broker suing over non payment of broker fees

Postby BubbaJoe123 » Tue Jan 19, 2016 11:52 am

As many a wise law professor has said, "you can always sue - the question is, can you win?"

Absent any sort of evidence that you agreed to pay a broker's fee (no signed agreement, not even an ad stating there was a fee), I can't see how the broker could expect to collect from you.

Did the broker not have you sign an agency disclosure (like this: http://www.dos.ny.gov/forms/licensing/1735-a.pdf)?

Appear in court (I assume it's in small claims), defend yourself, and you should be fine.
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Re: Broker suing over non payment of broker fees

Postby Achow8 » Tue Jan 19, 2016 12:24 pm

I did not sign anything with the agent. The only agreement I signed was a roommate sharing agreement between my roommate and me that stated I had to pay rent on time, keep the place clean etc. My roommate had asked the broker to draft that agreement (believe she pays him a fee for securing tenants) so the agreement initially had a statement in it stating that I would pay the broker fee but my roommate and I both agreed to strike that out and we both initialed on the change. I have a copy of that agreement that I plan to bring to court. What else would you suggest I bring? Should I contact the ny department of state or any regulatory authority prior to appearing in court? Should I also hire an attorney? I have never appeared in court before and any advice there would be much appreciated.
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Re: Broker suing over non payment of broker fees

Postby BubbaJoe123 » Tue Jan 19, 2016 2:31 pm

Achow8 wrote:My roommate had asked the broker to draft that agreement (believe she pays him a fee for securing tenants) so the agreement initially had a statement in it stating that I would pay the broker fee but my roommate and I both agreed to strike that out and we both initialed on the change. I have a copy of that agreement that I plan to bring to court. What else would you suggest I bring?


That should be sufficient. If you have a screenshot of the ad, that couldn't hurt either. Also, if there are any emails or texts between you and the broker, have those as well.

I assume this is small claims court?

Have you made clear to the broker that you and the primary tenant agreed that you would NOT be responsible for the broker's fee? If the tenant hired the broker (and there's no agreement shifting fee responsibility to you), then the tenant's on the hook for the fee. The broker should be suing the tenant, not you.
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Re: Broker suing over non payment of broker fees

Postby Achow8 » Tue Jan 19, 2016 3:36 pm

Yes it is a small claims court. The primary tenant has a separate arrangement with the broker and from what I know she had paid him the fee they agreed upon already. I have had no further communication with that broker after I met with the primary tenant and agreed to move in. I did not feel the need to respond to his follow ups as I felt his request for payment of broker fees were illegitimate. Will it be held against me that I did not make my intentions of not paying him clear? Also I just re-read the notice and I have an opportunity to file a counterclaim - do you think I have a basis to build a counterclaim against him?
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Re: Broker suing over non payment of broker fees

Postby Cranky Tenant » Tue Jan 19, 2016 4:02 pm

Achow8 wrote:In addition, the building is a no fee building and I was advised by property management that it is inappropriate for this broker to charge a fee. Subsequent to agreeing with my roommate to move in, the broker then notified that I owed him one month's broker fee. I also later found out (and perhaps not so relevant with respect to the broker) that the living arrangement was illegal as my name was not only not on the lease but my roommate never registered me as a co-tenant.


I'm not sure there's any such thing as a "no fee" building. While management may not choose to use brokers there's probably nothing to stop individuals from using them to find roommates. Unless the agreement (which you say you didn't sign) says you'll be a co-tenant, using a broker to secure a roommate doesn't seem illegal either. Still, I would check with the State to see if this person actually has a Broker's License. Only licensed brokers are legally entitled to collect broker's fees.

Beyond that, I would think the person who signed the agreement (your former roommate?) would be the one responsible for the fee. Most likely this person has served you with papers simply to intimidate you in hopes that you'll settle. One would think legitimate brokers would have better things to do with their time.
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Re: Broker suing over non payment of broker fees

Postby TenantNet » Tue Jan 19, 2016 4:45 pm

See if the broker is a corporation, or employed by a corporation. Only individuals can start a case in SCC. https://goo.gl/Sux2ZH

See if the name of the broker on whatever you signed is the exact same as the name on the caption of the court petition.

Are you a prime tenant (is your name on the lease?) BTW, your arrangement with the roommate was not necessarily illegal as you suggest in your first post. A prime tenant may have a roommate who is not on the lease.

You say there was a clause on the agreement between you and the prime tenant, but that the clause was struck out and both initialed it. Remember that agreement was between you and the prime tenant. The broker is not a party, so IMHO he lacks "standing" to bring a suit if he is relying on that clause (also he may just be mistaken if he doesn't know it was struck out). If he feels he's entitled to a fee, his remedy is to seek it from the prime tenant, not you.

Of course my comments are general and I have not read any of the details of any of your agreements.


See if the broker is licensed http://goo.gl/nCM3z8
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Re: Broker suing over non payment of broker fees

Postby Achow8 » Tue Jan 19, 2016 7:20 pm

Agree with your points. Only agreement I signed was the one between my former roommate and myself.

Also to answer your question, I'm not listed at all on the lease. Property management was not notified that I was an occupant, which may not be illegal but probably not by the book. In any case, that is between the prime tenant and property management so don't think it would be factored into my case against the broker?

Thanks for providing the link. I did check and he is a licensed broker. Also licensed to practice law (he uses esq. in his title).
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Re: Broker suing over non payment of broker fees

Postby TenantNet » Tue Jan 19, 2016 8:00 pm

FYI, Esquire can have other uses than a law degree.
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Re: Broker suing over non payment of broker fees

Postby TenantNet » Tue Jan 19, 2016 8:07 pm

We asked Lorenzo from RDNY.com, one of our advertisers, and a licensed NYC real estate broker and licensed Apartment Information Vendor:

This seems to be a fairly straight forward brokerage commission liability case that the agent/broker should lose.

The material points are:

1. The person being sued is not the person who contracted for the broker’s services. No legal relationship exists between agent/broker and the tenant’s roommate, beyond the fact that the agent matched the roommate with the tenant.

2. There is no signed broker’s commission between the defendant and the agent or broker. A brokerage commission agreement must be in writing in New York State.

3. Neither the agent nor broker gave the required broker representation disclosure forms to the defendant. Defendant never acknowledge receiving such a disclosure form in writing.

4. The defendants was not a signer of the lease. She/He was knowingly brought into this situation by the agent as a roommate and not as a tenant to be included, by name, in the lease.

5. The defendant’s relationship to the apartment is solely as a roommate of the official tenant, the signer of the lease. Not a co-tenant whose name is on the lease.

6. A written roommate agreement exists between the tenant and the defendant. Unless there is language in this roommate agreement making the defendant liable for any part of the brokerage commission, then no such liability exists.

7. As a general rule, landlords are entitled to know when an apartment is being shared with a person whose name is not on the lease.

In rent stabilized apartments, tenants have a right to have a roommate or significant other move into their apartment, although they also have the obligation to disclose this information to the landlord. The landlord may not prohibit the other person from living in the apartment (except in very narrow and specific cases), but the landlord is nonetheless entitled to ask the roommate to fill out some paperwork letting the landlord know who the proposed roommate is and how they can be contacted.

In non-rent stabilized apartments, the landlord has the right to prohibit any person whose name is not on the lease from living in the apartment. In almost all non-rent stabilized leases (known as a 'prime lease’), the lease mandates that landlord’s approval must be obtained in order for a roommate to move in with a tenant. The apartment owner has the right to reject a roommate.

From the defendant’s description of the events in this case, it is clear that neither the tenant of the apartment nor the agent sought to gain landlord’s approval for the roommate. Such failure to obtain landlord’s approval is almost certainly a violation of the lease's provisions regarding roommates or shares. It was the obligation of the tenant to secure such approval from the landlord or, if approval was not necessary, to inform the landlord of the existence of the roommate.

It seems reasonably clear that as a matter of law, the defendant will not be held liable for the payment of a brokerage commission to the real estate agent/broker.

However, the defendant never mentioned whether he signed any papers with the agent regarding a fee for having found him the roommate with an existing apartment tenancy.

If the defendant signed a roommate finding agreement with the agent, and that agreement calls for the paying of a fee by the defendant, then the defendant will most likely be liable for the amount of the roommate finding fee.

Defendant states that an agreement to find a roommate exists, and calls for the paying of a fee by the existing tenant. From the defendant’s description in an earlier post above, she/he believes that such an agreement exists and that the tenant has already paid the fee called for in the agreement. I hope the defendant has a copy of that agreement, which would show that the obligation is not hers/his to pay the agent.


We generally agree with Lorenzo's points #1-6.

We disagree with parts of Lorenzo's part #7...

The LL can ask the prime tenant for the names of all people living in the unit. If asked, the tenant needs to reply. In my experience, the tenant need not volunteer the info unless and until asked. But in any case, the roommate is not obligated to fill out any paperwork and we caution roommates to not do so, no matter what it says (other than the person's name). DO NOT LET THE LANDLORD intimidate you. DO NOT sign papers that you don't have to sign.

In particular the nature of the relationship is off-limits to being asked. (which is why it's called the "live-in lover law"). It is not the LL's business the nature of the relationship between the roommate and the prime tenant.

Also...

"In non-rent stabilized apartments, the landlord has the right to prohibit any person whose name is not on the lease from living in the apartment."

Real Property Law section 235-f is not limited to only rent stab units. As far as I know, even in non-RS units the LL can't prohibit occupancy by a roommate (but must be disclosed). See http://codes.findlaw.com/ny/real-proper ... 235-f.html

But even if there are lease violations, in this instance the LL is not suing the tenant or the roommate. The broker has no standing to claim lease violations. So that issue doesn't matter here.
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Re: Broker suing over non payment of broker fees

Postby Achow8 » Tue Jan 19, 2016 9:40 pm

Thank you - very helpful.

Re: point #6 - I did sign a roommate apt sharing agreement with the tenant and in the agreement (and because the prime tenant asked the broker to draft it) the agent inserted a provision stating that I am to pay the broker his fees. The roommate and I struck it out and both initialed on the agreement. Someone had mentioned earlier that regardless of that provision being present or not, the agreement is between me and my roommate so the broker who is not a party to the agreement should not be entitled to a fee on that basis. Is that correct?
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Re: Broker suing over non payment of broker fees

Postby TenantNet » Tue Jan 19, 2016 10:21 pm

Asked and answered.
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Re: Broker suing over non payment of broker fees

Postby BubbaJoe123 » Wed Jan 20, 2016 6:29 am

Achow8 wrote:Someone had mentioned earlier that regardless of that provision being present or not, the agreement is between me and my roommate so the broker who is not a party to the agreement should not be entitled to a fee on that basis. Is that correct?


Yup. That provision (if it hadn't been struck out) would only give the tenant the right to come after you for the brokerage fee. If the broker has an agreement with the tenant, then the broker needs to go after the tenant.
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