Cozy Landlord - Broker Relationship in NYC?

[abwe]

Hi.

When I moved into my apt a year or so ago I paid a fee (12% of the lease value) to a firm designated as the "exclusive" broker for my building - it even says so on a big sign outside my building.

The back story: I am planning to move to another city to take a 1-2 year job before coming back to NYC. I called my mgmt company (which is large and though impersonal but has always seemed pretty by-the-book) to ask if, when I return to to NYC, I could apply for any vacancies that might be in my current building without going through the broker, as I have had a good record with them, etc.

Though the building manager refused my request, he cited reasons including: "the broker wants to get paid" and "we employ the broker to find us tenants." I have a recording of this conversation, and of these statements.

My question is: is there any way the broker fee I paid is legitimate?

The relevant law seems to say no: "the term rent, as herein before defined, shall also include the payment by a tenant of a fee or rental commission to an owner or to any person or real estate broker where such person or real estate broker is an agent or employee of the owner employed by the owner in connection with the operation or management of the building in which the housing accommodation is located, or where the owner or his or her employee refers the tenant to such person or such real estate broker employed by the owner in connection with the operation or management of the building, for the purpose of renting the housing accommodation, or where there is common ownership, directly or indirectly, or a financial interest between the owner and such person or real estate broker."


I am thinking of withholding rent in the amount of the brokers fee by citing the common interests between the management and the broker and want to make sure I am right.

I worry I am missing some key point, as the broker and building are so up-front about their 'exclusive' relationship.

FYI the management company and the brokerage firm are separate legal entities with different addresses, etc.

Any advice?

Many, many thanks.

I am new here, and this site is a great resource.

[Cranky Tenant]

Hi.

Though the building manager refused my request, he cited reasons including: "the broker wants to get paid" and "we employ the broker to find us tenants." I have a recording of this conversation, and of these statements.

My question is: is there any way the broker fee I paid is legitimate?

<==snip==>
FYI the management company and the brokerage firm are separate legal entities with different addresses, etc.

"Employ" and "exclusive" don't always mean what you seem to infer. The building manager could've simply meant they use this particular broker to rent apartments. If this is a licensed broker who's a separate legal entity, with a separate address, he probably was just using the term loosely. In fact, if renting apartments is contingent on the broker getting a commission, that would imply he's not an actual employee, as opposed to a super who shows apartments, when available, and is paid by the LL regardless of how many he rents.

Also, in real estate, when a broker has an exclusive that means they receive a portion of any broker fee regardless of who actually rents the apartment. It doesn't mean they're married.

http://www.investopedia.com/terms/e/exc ... z1vFBJrvl9

If you feel the broker wasn't entitled to the fee then you should contact the NYS Department of State If the landlord and brokers are separate entities I'm not so sure you can hold the LL responsible for the broker's fee.

[abwe]

Thanks, crankytenant.

By 'exclusive' I mean that the mgmt company says that the ONLY way to rent an apartment is through this particular brokerage firm. And yes, I concede that there is more than one meaning of the word "employ."

The point of law I am concerned with is the last clause "... or a financial interest between the owner and ... real estate broker"

If there is any financial transaction whatsoever between the broker and the owner, doesn't that constitute "financial interest"? And indeed, if i call my management company and they are actively defending the interests of the broker, does that not at least suggest that such an commonality of interest exists?

[Cranky Tenant]

It doesn't seem unusual that a LL would direct potential renters to a particular broker if he feels the broker is reliable in terms of doing credit checks and finding new tenants quickly. Plenty of landlords don't want to be bothered showing apartments, running credit checks and drawing up leases. Since the fee, at least in in NYC, is paid by the renter, landlords really have little to lose by using a broker.

Either way, it would be your case to prove and I think you'd need a bit more evidence to demonstrate the relationship between the two is improper.

[ronin]

Also, you have no special status after you drop your tenancy to move out of town. When you come back you are being treated just like everyone else.

Withholding rent in this situation is a good way to get evicted.

The LL may be required to pay the broker anyway, as Cranky stated. It's not regulated and you have no leg to stand on. There may even be a wait list. You also assume a vacancy just waiting for your return.