Letter from the Rand Family to all our Clients — UPDATED 3.20.20

UPDATE 3.21.2020.  As per the new New York  and New Jersey  “stay-at-home” restrictions, we are now instructing our agents to no longer provide showings of listings.  Our offices are totally closed, and we encourage everyone to stay at home at all times unless you have “essential business” until we get further guidance fromhttp://josephrand.randrealty.com/wp-admin/edit.php the state.

Note: A formatted version of the original letter can be found here.

To all our Rand Realty clients:

 
As the owners of Rand Realty, we wanted to thank you for the opportunity to work with you. Rand Realty has been a family business for over 35 years, and we have gotten through myriad challenges in that time. We will all get through this.
 
We wanted you to know that during this challenging time, our first priority is to protect the health and safety of our clients, agents, and employees. Last week, we published a General Advisory about best practice protocols for reducing the risk of contracting the coronavirus, which pulled information provided by the Center for Disease Control and other reliable sources. We have also been providing daily updates to our agents via email, daily conference call, and on social media. At the bottom of this email, you’ll find links to all relevant sites and phone numbers you might need to get updates. 
 
Even in these difficult times, though, we know that many of you need to proceed with your home search or sale, and that others are already in contract and need to get to closing. So we want you to know that we remain available to help you with whatever you need, even though our regular routines will have to adapt to these changing circumstances. 
 
Accordingly, we are providing these services in compliance with the following Coronavirus Protocols:  
 
1.  Offices may be closed
Our offices have been closed to the public, and most of our employees and agents are working from home.  Your agent still has access to office facilities as needed, as well as our online suite of tools.
3.20.20 Update: In keeping with state “Pause” restrictions, are offices are totally closed to the public and to agents.  
2.  We are discontinuing all open houses
We will no longer be hosting public open houses or broker open houses. We are still providing showings of our listings, but only by appointment. We simply do not think it’s a good idea to attract groups of people to our clients’ listings. 
 
3.  Our listings remain available if sellers wish it.
Unless you are being quarantined because you are in a high-risk category, or you are feeling unwell, we have been advised that letting people into your home for a brief showing, does not create a significant risk of transmission. That may change as circumstances warrant, but at least for now we are still allowing showings of our listings (if the sellers wishes it). Our sellers who wish to stay on the market should review our Seller Showing Protocols to learn how to protect their home and themselves during showings, including:
 
  • No more than one group of up to three people seeing a home at a time.
  • Stay home for the showing, but keep your distance.
  • Have rubber gloves available, if possible.
  • Have sanitizing products ready.
  • Open windows
  • When the showing is over, wipe everything down.
3.20.20 Update: In keeping with state “Pause” restrictions, we are no longer allowing showings of our listings.
4.  We will continue to provide showings if buyers wish it.Unless you are being quarantined because you are in a high-risk category, or you are feeling unwell, we have been advised that going to see a home does not create a significant risk of transmission. That may change as circumstances warrant, but at least for now we are still providing showings for our buyers (if the buyer wishes it). All buyers should first review our Buyer Showing Protocols that we have published online, including:
 
  • No more than one group of up to three people seeing a home at a time.
  • Keep your distance: no handshakes.
  • Everyone should drive their own car.
  • Bring sanitizing products.
  • Wash your hands going in and out.
  • Leave no fingerprints — wear disposable gloves or us wipes to open doors and pulls. 
3.20.20 Update: In keeping with state “Pause” restrictions, we are no longer providing showings to our listings.
 
5.  We are following best hygienic practices for in-progress transactions.
For those transactions that are currently going into contract or are progressing from contract-to-closing, we are encouraging all parties to maintain good hygienic protocols for inspections, appraisals, and showings:  maintain physical distance, no hand-shaking, wash hands, and so on.  For closings, we are encouraging attorneys to stagger their closings rather than require all parties to be at a closing table at the same time. 
 
6.  We encourage videoconferencing rather than meetings.
If at all possible, we encourage you to do more videoconferencing with your agents and anyone else involved in your transactions. All our agents have access to Google Hangouts, which is an easy-to-use universal system that requires no special software or hardware. 
 
7. We recommend that at-risk clients and agents stay home.
All that said, we STRONGLY recommend that at-risk clients discontinue their home search or sale for the next few weeks.  That includes anyone over the age of 65 or those with preexisting conditions with their lungs, hearts, or diabetes.  Similarly, we have recommended to any at-risk agents that they take a break from working, and refer out any clients who wish to stay active, so please understand if your agent needs to refer you to one of their colleagues. And, of course, if you are not feeling well, we absolutely recommend that you stay home and isolated.  
 
Finally, we note that we are sending this Advisory on March 17th.  Events have moved quickly over the past week, so we don’t know if circumstances will change at some point soon. If we do make any changes to these policies and protocols, we will let you know immediately   
 
And if you want help or more information, here are some links and numbers you can use:
 
Thank you again for the opportunity to work with you.  If we can do anything to help you in this challenging time, please let us know.
 
The Rands
Marsha, Matt, Joe, and Dan 

Posted on March 18, 2020 at 3:27 pm
Joseph Rand | Posted in Client Advisory, Coronavirus |

Rand Realty Advisory for Buyers: Hygienic Showing Protocols

UPDATE 3.21.2020.  As per the new New York  and New Jersey  “stay-at-home” restrictions, we are now instructing our agents to no longer provide showings of listings, and we encourage everyone to stay at home at all times unless you have “essential business.”
UPDATE: 3.17.2020.  As of this writing, we have been advised that showings pose a minimal risk to our agents and clients, so long as everyone follows good hygienic protocols to protect all of us.  If you do not want to go on showings, that’s your decision and we completely respect it. We work for you. And we certainly echo the advice we are getting from authorities to stay home as much as possible.  
But if you do want to go on showings, here are the protocols you should follow:
1.  No more than one group of three people.
Showings should be for one group at a time, with no more than three total people going through a home at the same time — all of whom should keep distance from one another.
2.  Keep your distance.
It’s natural to want to shake hands with people at the showing, but you need to resist that impulse. Keep a distance of 5-6 feet from other individuals throughout the showing, and don’t touch. Don’t even bump elbows, because that puts you too close.  Use the “hand over heart” greeting. 
 
3.  Everyone in their own car
Agents often drive their buyers on showings.  No more.  Everyone should drive their own car.
 
4.  Bring sanitizing products
Make sure to bring your own sanitizing products, if possible:
 
  • Disposable rubber gloves that you can wear for each showing.
  • Hand sanitizing gel
  • Anti-bacterial wipes
  • Disposable paper products: paper towels, napkins, tissues.
 
5.  Wash your hands
Ideally, you should wash your hands in the home when you enter and when you leave.
 
6.  Leave no fingerprints.
To protect yourself and the seller, take precautions about touching any objects in the home, especially including door handles, drawers, and cabinets:
  • If you have disposable rubber gloves, put them on when you get to the home, then take them off and throw them out when you leave. Use a different pair of gloves for each house.
  • If you have hand sanitizer or wipes, clean your hands when you enter the home, and then clean them again when you leave.  
  • Keep a sanitizing wipe in your hand, and use that hand to open any doors or draws. If you don’t have a wipe, use a disposable paper product (paper towel, tissue, napkin) that keeps your hand from touching any surface.    

Posted on March 16, 2020 at 10:00 pm
Joseph Rand | Posted in Client Advisory, Coronavirus |

Rand Realty Advisory: Showing Instructions for Sellers Showing their Home

UPDATE 3.21.2020.  As per the new New York  and New Jersey  “stay-at-home” restrictions, we are now instructing our agents to no longer provide showings of listings, and we encourage everyone to stay at home at all times unless you have “essential business.”
UPDATE: 3.17.2020.  As of this writing, we have been advised that showings pose a minimal risk to our agents and clients, so long as everyone follows good hygienic protocols to protect all of us.  
If you do not want to allow showings on your listing, that’s your decision and we completely respect it. We work for you. And we certainly echo the advice we are getting from authorities to isolated at home as much as possible.  
But if you do want to keep your home on the market, here are the protocols you should follow:
1.  No more than one group of three people.
Showings should be for one group at a time, with no more than three total people going through a home at the same time — all of whom should keep distance from one another.

2. Stay home for the showing, but keep your distances

Usually, we think that sellers should absent the home during a showing, but in these circumstances you should be home to make sure that the buyers conduct a hygienically sanitary showing. If you do stay home, though, keep your distance! It’s natural to want to shake hands with people at the showing, but you need to resist that impulse. Keep a distance of 5-6 feet from other individuals throughout the showing, and don’t touch. Don’t even bump elbows, because that puts you too close. Use the “hand over heart” greeting.

3. Have rubber gloves for showings, if possible

Ideally, you should have rubber gloves for buyers and buyer agents to put on during showings. They can put the gloves on when they enter the home, and then take them off and dispose of them when they leave. That ensures they’re not making any contact with anything in the home. Keep the gloves near the front door, along with a trash can where they can be thrown out when the visitors are done.

4. Have sanitizing products ready

If you can’t have gloves handy, have hand sanitizer and/or wipes handy in case the buyers didn’t bring any (they should, but you never know). If you don’t have gloves, put out napkins that visitors can hold in their hands to open doors and drawers. And make sure you have soap in a bathroom near the entrance, so you can ask people to wash their hands when they enter.

5. Open windows

If it’s not too cold, and the weather is cooperating, open some windows in the house to get the air flowing.

6. When the showing is over, wipe everything down.

For your own peace of mind, you should take a disinfecting wipe and wipe down everything when your visitors leave. That includes door handles, cabinet and drawer pulls, and any surfaces they might have touched.


Posted on March 16, 2020 at 9:57 pm
Joseph Rand | Posted in Client Advisory, Coronavirus |

Rand Realty Client Advisory: Taking Special Precautions During the Coronavirus Epidemic

UPDATE 3.21.2020.  As per the new New York  and New Jersey  “stay-at-home” restrictions, we are now instructing our agents to no longer provide showings of listings, our offices are closed, and we encourage everyone to stay at home at all times unless you have “essential business.”

UPDATE: 3.17.2020

A message to our clients:

We understand if you want to take a break from buying or selling a home during the coronavirus outbreak, and give the virus time to run its course. That’s your decision, and we respect it.  We will keep you informed about what’s happening in the market in the meantime, and will be prepared to help you when you’re ready to get back in.

But if you do wish to continue the process of buying or selling your home, we are ready and able to assist you. As we write this in mid-March, healthy people are not being advised to self-quarantine unless they are in “hot zones” or have pre-existing conditions that make them particularly susceptible to the coronavirus – if they are over 60 years old or have heart or lung problems.  So for most of you, there’s no reason you can’t continue to look for a home, or keep your home on the market — so long as you take some fundamental precautions.

 

  1. Wash your hands – and other hygienic practices

Soap is the very best preventative for communicating the virus, so use it.  Wash your hands regularly, for at least 20 seconds, with soap and water.  If you can’t wash your hands, the next best thing is to use an anti-bacterial wipe or gel both before and after you come into contact with other people, objects, or surfaces. And try to avoid touching your eyes, nose, and mouth with unwashed hands. If you sneeze or cough, do it into a tissue, then throw away the tissue, then wash your hands or wipe them down.

 

  1. Keep your distance – even from your agent!

You don’t need to hide in your basement, but you should try to keep a “social distance” from others when working, shopping, socializing. Give yourself 5-6 feet of distance from other people if possible, and avoid large groups of people. And that goes for greetings — no kissing, hugging, handshakes. Even the elbow shake is probably not a good idea. Instead, try the “heartfelt” gesture: both hands over your heart and a nod of your head to the person you’re greeting.

 

  1. Use videoconferencing as much as possible.

You and your agent – and anyone else you’re working with on your transaction –should try to communicate as much as possible by videoconference rather than in-person meetings, just to limit the amount of interaction you have with other people.  if you are all on iPhones, you can easily do a Facetime meeting. And if you are all on Facebook, then Facebook Messenger has an easy-to-use video conferencing tool.  But you can also use any number of apps and services for video, including Whatsapp, Snapchat, Skype, and Zoom.

 

  1.  Stagger the closing.

Talk to your attorneys about setting up staggered closings to avoid requiring all the parties to be in the room at the same time. You need to sign papers and fulfil some other closing functions, but you don’t necessarily need to do that with the other side present.

 

  1. 5.  Take precautions on showings and open houses.

At this point, we see no reason to discontinue showings or open houses so long as you follow fundamental distancing and hygienic protocols.  Try to follow these guidelines:

  • Keep your distance, even if it seems unfriendly.
  • Remember: no shaking hands when you meet!
  • Drive your own car to showings, rather than traveling with the agent in his or her car.
  • Minimize touching of surfaces in houses.
  • Bring paper towels with you, and use a clean paper towel or tissue to hold when you open doors or touch surfaces. .
  • Try to wipe down every surface or handle after the showing or open house.
  • Try to wash or wipe down your hands on the way in, and the way out.
  • At the open house, keep your distance from other visitors, and let the hosting agent sign you in rather than handle a clipboard or tablet.
  1. Buy some disposable gloves

if you can get some disposable gloves, keep them in your car for when you go on showings.  Put on a pair when you go into the house, and then strip them off and throw them away when you leave. It’s a good way to avoid touching any surfaces with your bare hands.

 

  1.  Stay home if you’re not feeling well!

All this applies ONLY if you’re feeling okay.  If you’re not feeling well with any kind of cough or fever, stay home. At this point, you probably have a normal flu or some common cold, but don’t take chances. Call your doctor and otherwise get help. But if you’re not well, you shouldn’t be out looking at houses, or having someone come to see your home for sale.

 

NOTE: If you are high-risk, then stay home!

Everything we’ve said here applies only to healthy people who are not in a high-risk category.  If you are over 60, or have pre-existing heart or lung problems, you should probably be limiting your outside contacts as much as possible to reduce your chances of catching the virus. If you do need to go out, then take extra precautions and be extremely careful.

 

 

 


Posted on March 11, 2020 at 2:35 pm
Joseph Rand | Posted in Client Advisory, Coronavirus | Tagged

Agent Advisory: Seven Tips for Real Estate Agents About Taking Care of Themselves and Their Clients During the Coronavirus Epidemic

UPDATE 3.21.2020.  As per the new New York  and New Jersey  “stay-at-home” restrictions, we are now instructing our agents to no longer provide showings of listings, our offices are closed, and we encourage everyone to stay at home at all times unless you have “essential business.”

Can you continue to work through the coronavirus epidemic? Yes, but you need to take precautions.

As we write this in mid-March, healthy people are not being advised to self-quarantine unless they are in “hot zones” or have pre-existing conditions that make them particularly susceptible to the coronavirus – if they are over 60 years old or have heart or lung problems.  So for most of you, there’s no reason you can’t continue to work, and your clients can’t continue to buy and sell homes.

That said, you should be careful about how you talk to your clients about buying or selling homes, and sensitive to their concerns. We don’t think it’s a good idea to blast out emails or posts like “RATES ARE LOW – IT’S a GREAT TIME TO BUY!!!!” when people around the country are sick and maybe dying.  You never know if that client has a family member who has been afflicted.  So be careful in your messaging, and provide them with the advisories we’ve prepared for our clients.

As for you, you should take some basic precautions to protect your business and your clients during this time:

  1.  Prepare yourself to work remotely.

You should be prepared that we might at some point get advice or instruction to close the offices and work solely from home. Do you have all the equipment you need? Do you have all the papers you need? Do you have access to all your accounts from a laptop or home computer? If you don’t, then now is the time to get prepared for a potential lockdown.

  1.  Prepare your “vacation coverage.”  

You know how you prepare coverage with your colleagues for when you go on vacation — “while I’m away, could you handle my calls, and I’ll pay you a referral fee if they buy/sell?”  You should find someone you trust right now, and make your arrangements to cover situations if either of you get sick or get quarantined.  You don’t want your business to grind to a halt.

  1. Learn how to use video conferencing.

As we get further into this pandemic, you’ll want to limit travel and in-person meetings as soon as possible. It’s a good reason to get familiar with videoconferencing systems that you can use to meet virtually with clients:

 

  • Google Hangouts. You all have access to Google’s videoconferencing system through our deal with Google.  Learn how to use it!
  • Facebook Messenger: You and your clients are both probably on Facebook, which means you can use the Messenger video conferencing feature.
  • Facetime: if you and your clients are both Apple iPhone users, you can communicate easily through Facetime.
  • Skype: Skype is the original videoconferencing app. You and your clients will both need accounts, but they’re easy to set up.
  • Snapchat: You may not be on Snapchat, but your younger clients probably are – and it has videoconferencing features.
  • Whatsapp: Whatsapp is also popular among younger people and international clients, and has an easy-to-use video feature.
  • Zoom: the advantage of Zoom is that you can invite your clients to videoconference through a browser, without requiring them to have an account or an app.

Practice with them now so that you’re familiar with them if and when you need them.  And, to be honest, you should probably know how to use them anyway!

  1.  Buy a box of disposable gloves for showings

Buy a box of disposable gloves that you can give to your clients on showings.  They can put on the gloves when they go into a house, and then throw them away when they leave.  it’s a good way to avoid touching anything surfaces you’re your bare hands.  And get a box for each of your sellers so they can leave them at the front door for visitors.  Right now, you can buy a box of 100 gloves on Amazon right now for about $15, and have them delivered in a couple of days.

  1.  Reduce in-person closings

We’ve always said that there’s no reason we need everyone to be in a room for a closing. Now, we should live by that.  Talk to your attorneys about setting up staggered closings to avoid requiring all the parties to be in the room at the same time.

  1.  Continue to hold showings and open houses. 

At this point, we see no reason to discontinue showings or open houses so long as you follow basic distancing protocols.  Try to follow these guidelines:

  • Keep your distance, even if it seems unfriendly.
  • Remember: no shaking hands when you meet!
  • Let your buyers drive their own cars on showings
  • Remind people to minimize touching of surfaces in houses.
  • Get a clean paper towel or tissue to hold when you open doors.
  • Leave interior doors open when possible so buyers don’t have to use door handles.
  • At open houses, use a “one group at a time” rule for each floor of a house, to minimize interaction among visitors.
  • Sign people in yourself on your phone or tablet, rather than requiring them to touch anything.
  • Try to wipe down every surface or handle after the showing or open house.
  • Try to wash or wipe down your hands on the way in, and the way out.
  1.  Maintain a positive attitude for your clients

A great real estate agent provides clients with amazing service experiences regardless of the situation. While recognizing the seriousness of the situation, try to focus on what your clients need from you, and how you can give it to them. Again, without being too pollyannaish about what is going to be a difficult time for many people, remember some basic messages for our clients:

  • For buyers: It really is an amazing time to buy a home with rates lower than at any time in 50 years, and other buyers sitting on the sidelines.
  • For sellers: there’s no reason to stay off the market right now — buyers are still out there, and showings carry a minimal risk of infection if you take basic before-and-after precautions.
  • For sphere clients: If you have not refinanced your mortgage in the past year, you should look at doing it now.

Again, the point is simple: we should continue to do our jobs. Our clients need us.

 

 

 

 

 

 

 


Posted on March 11, 2020 at 2:32 pm
Joseph Rand | Posted in Coronavirus | Tagged

Rand Realty’s Advisory: What You Need to Know to Protect Yourself from the Coronavirus

UPDATE 3.21.2020.  As per the new New York  and New Jersey  “stay-at-home” restrictions, we are now instructing our agents to no longer provide showings of listings, our offices are closed, and we encourage everyone to stay at home at all times unless you have “essential business.”

 

Published March 11, 2020

UPDATE March 17, 2020

We wanted to put out this general Advisory about the Coronavirus Epidemic, and what our clients, agents, and employees should be doing to minimize the spread of the virus.

First of all, if you are at high-risk, you should be staying isolated at home except if you need to go out for groceries, medicine, or medical treatment. What do we mean by high-risk?

  • If you have pre-existing heart troubles.
  • If you have pre-existing respiratory troubles.
  • If you are diabetic.
  • If you are over 60 years old.

People at high-risk are at an elevated risk of severe illness from the coronavirus, so they should be especially careful about staying close to home during this time.

But even if you’re not high-risk, you should stay home as much as possible, and follow hygienic protocols to reduce your risk of catching or spreading the virus.  Why?

  • The coronavirus has proven to be fatal even to healthy people — the chances are lower than if you’re high-risk, but the virus is still a lot more deadly than the average flu.
  • Even if you’re asymptomatic, you could be a carrier, and you could communicate the virus to someone who is high-risk.
  • As a society, we need to reduce the spread of this virus in order to lower the burden on our health care infrastructure — we want to “flatten the curve” of the spread of the infection so we don’t overwhelm emergency rooms and intensive care units.

So what kinds of precautions should you take?

  1.  Wash your hands!

Soap is the very best preventative for communicating the virus, so use it.  Wash your hands regularly, for at least 20 seconds, with soap and water.

  1.  Use Anti-Bacterial wipes and gel.

If you can’t wash your hands, the next best thing is to use an anti-bacterial wipe or gel both before and after you come into contact with other people, objects, or surfaces. And use those wipes to wipe down any objects or surfaces you touch or plan on touching.

  1.   Social Distancing: Keep your distance!

If you do have the leave your home, should try to keep a “social distance” from others when out of your home. Give yourself 5-6 feet of distance from other people if possible.

  1.  Social Distance Greetings: No handshakes, hugs, kisses

No kissing, hugging, handshakes. Even the elbow shake is probably not a good idea. Instead, try the “heartfelt” gesture: both hands over your heart and a nod of your head to the person you’re greeting.

  1.  Avoid large groups.

Avoid gatherings of more than a dozen people in close proximity. Don’t go to dinner — get takeout instead.

  1.  Hands off your face!

Try to avoid touching your eyes, nose, and mouth with unwashed hands.

  1.  Keep tissues handy for coughs and sneezes.

If you sneeze or cough, do it into a tissue, then throw away the tissue, then wash your hands or wipe them down.  If you don’t have a tissue, cough or sneeze into your elbow, not your hand — and then wash or wipe yourself down.

  1.  Stay isolated if you’re not feeling well!

If you’re not feeling well with any kind of cough or fever, stay isolated home. At this point, you probably have a normal flu or some common cold, but don’t take chances. If your symptoms become serious, call your doctor or get medical attention.

  1.  Strengthen your immune system

You can strengthen your immune system by taking some simple measures like:

  • Getting more sleep
  • Eating healthier
  • Staying hydrated
  • Taking more vitamins, especially Vitamin D, Zinc,
  1.  STAY HOME!!!

If you don’t need to be out of the house, then stay home. If you have to leave, practice social distancing and use your wipes to clean surfaces and your hands.  That’s the best way to limit social interaction and slow the spread of the virus.

 

If you need help:

Symptoms of Coronavirus

Coronavirus is marked by fever and cough. If you’re not well, but suffering from other symptoms, you might have a simple cold or more common flu.

Usually:                                   Sometimes:                             Rare or Never:
Fever                                       Aches and Pains                      Sneezing

Cough                                      Headaches                              Running or stuffy nose

Shortness of Breath                Diarrhea

Emergency warning signs include difficulty breathing, shortness of breath, pressure in the chest, or bluish lips or face. If you present these emergency signs, get medical attention immediately.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Posted on March 11, 2020 at 2:30 pm
Joseph Rand | Posted in Agent Advisory, Client Advisory, Coronavirus | Tagged

An Informal Legal Opinion: Why I think that DOS Might be Wrong About the New “Broker Fee” Rule Barring Tenants from Paying Landlord Agents

The entire New York real estate industry got thrown a curveball this week when the Department of State released on Wednesday an advisory providing guidance about the Statewide Housing Security & Tenant Protection Act of 2019 and the Housing Stability & Tenant Protection Act of 2019, legislation signed last summer dramatically revised landlord-tenant law.

 

The new legislation significantly increased tenant protections in a number of ways, putting significant new obligations on landlords, but did not specifically address the responsibilities of brokers and real estate agents in the process.  The new DOS guidance was designed to clarify that, explaining how DOS expected licensed professionals to ensure compliance with those rules. Most of the guidance essentially said something like “brokers can’t be a party to landlords who violate these rules.” Which is fine.

 

 

But in the midst of all that, DOS slipped in a major change to the way that the industry has operated for years:

5. CAN A LANDLORD’S AGENT COLLECT A “BROKER FEE” FROM THE PROSPECTIVE TENANT?
No, a landlord’s agent cannot be compensated by the prospective tenant for bringing about the meeting of the minds. NY RPL § 238-a(1)(a) provides, in part, “no landlord, lessor, sub-lessor or grantor may demand any payment, fee, or charge for the processing, review or acceptance of an application, or demand any other payment, fee or charge before or at the beginning of the tenancy, except background checks and credit checks….” The fee to bring about the meeting of the minds would be a “payment, fee or charge before or at the beginning of the tenancy” other than a background or credit check as provided in this section. Accordingly, a landlord’s agent that collects a fee for bringing about the meeting of the minds between the landlord and tenant (i.e., the broker fee) from the tenant can be subject to discipline.

Essentially, DOS specifically forbid real estate brokers working for a landlord from collecting a fee paid by the tenant.

 

To be clear, the new regulatory guidance did not bar broker’s fees in rental transactions. Rather, the guidance simply says that a broker for the landlord cannot collect a fee from the tenant. A broker working for the landlord can still collect a fee from the landlord  (which presumably would be passed through in the rent). And a broker working for the tenant can collect a fee from the tenant  (or from the landlord, for that matter).  But the broker working for the landlord can’t get paid by the tenant.

 

This isn’t such a big deal in many parts of the state. For example, in Westchester, it’s customary for the landlord to pay the full commission, and for the tenant to pay nothing to either her agent or the landlord’s agent. So in places like that, this change won’t have much of an impact.

 

But it’s a very, very big deal in Manhattan, where rental prices and brokerage fees are significantly higher than to the rest of the state, and where the common practice was to require the tenant to pay the full thing.   And, of course, Manhattan happens to be the media capital of the world, pretty much every journalist in Manhattan has probably rented an apartment and complained about the broker fees. That’s why this news got so much coverage.

 

Now, let’s make full disclosure: I’m a real estate broker (and an attorney). So I have a financial interest in all this, and everything I say from here on in should be be taken in that context. Okay? Just so that’s clear.

 

So here’s my opinion: I think it’s a bad rule, and that it won’t accomplish much of anything for consumers. For the most part, landlords will just build the brokers fee into the monthly rent, so tenants won’t have any real savings.

Even worse, I don’t like a rule that encourages consumers to avoid hiring their own agent in order to save on paying an upfront out-of-pocket tenant’s agent fee. On other words, tenants will understand that they don’t need to pay a fee if they go direct to the landlord, but will have to pay a fee if they hire their own agent  So they’ll start going directly to the listing broker  And that’s a terrible idea  It’s like buying a car from  a car dealer — everyone works for the seller,  no one works for you, and you have a massive informational disadvantage  Like, how will you find out what other similar apartments have actually rented for?  That’s the kind of info your own agent digs up; a listing agent isn’t going to be a reliable source of that

Generally, I think that everyone in a real estate transaction should have representation from an agent, just like every litigant should have their own attorney  It makes for a fairer process

That said, if we have to, we’ll all adjust to this new rule. If the DOS is going to require landlord brokers to get paid only by the landlord, then we’ll figure out how to work within the system. We can still get paid on the tenant side by the tenant, which means that landlords don’t have to pay both sides of the transaction unless they want to market their listings as “no fee” (which can be a good marketing angle).  After all, in residential sales, the compensation for real estate sales is generally paid by the seller — who is in the position of the landlord. It’s not a big adjustment. We’ll be okay, probably, and I expect that most other brokers will as well.

That said, I do have two issues with the new guidance that I wanted to get out there: (1) the way it was announced, and (2) the legal foundation for the brokerage compensation rule.

 

1.  The Announcement

I really think that the DOS could have done a better job promulgating this new guidance:

First, as far as I know, they never consulted with industry people to get our opinion while they were forming the rule.  Or at least, they never talked to me, and I’m like one of maybe 5 attorney/brokers in the state who specializes in brokerage law, and I co-own one of the biggest brokerages. I’m not saying they needed to listen to us, but they could have at least gotten our opinion.

Second, they announced the new guidance without any warning to the industry to be prepared for this change.  Again, as far as I know, none of us saw this coming, and we were all blindsided.  Many of us found out in media reports.  That’s not right.

Third, they didn’t give us any formal way to ask questions about the new guidance, or get clarification.  Would it have killed them to have a conference call with, say, the NYSAR legal department, or an open call with brokers and agents to take questions?  They put a phone number on the guidance itself to call for help. I called it. The person who answered said they didn’t know anything except what was in the guidance itself.  So not particularly helpful.

Finally, and this is the biggest problem, they didn’t clarify when the new rule was effective. We’re assuming it was effective immediately, and that’s the way we’ve treated it, but it would have been really helpful for DOS to announce that the rule was effective in, say, a week. Give us time to close out the transactions in the pipeline, which were agreed-to under the old rules.  Honestly, if a landlord and tenant reached an agreement that included the tenant paying a fee to the broker, and then the rule changes and we can’t charge the tenant, and then the landlord refuses to pay because our contract doesn’t provide for it — is that really fair?  That could have been avoided with a clear effective date.

Again, adopting the rule is one thing, but the way it was adopted is another. Simply put, it was really hard adjusting on the fly like we had to this week. It didn’t need to be that confusing and difficult.

 

2.  Whether the New Rule is Correct

 

Moreover, I do think that the DOS interpretation of the legislation is a little questionable.

 

Essentially, I think that DOS is wrong that the legislation itself prevents the landlord from requiring the tenant to pay a brokerage fee. The purpose of the legislation was to limit the fees collected and kept BY THE LANDLORD to the equivalent of one-month’s rent. That’s why, for example, the legislature also limited application fees to $20 — because they figured that the $20 was a passthrough to a third party, not payment to the landlord, and anything more than $20 would essentially be an upcharge.

 

But the legislature didn’t restrict fees to third parties. Landlords sometimes collect for a cable bill, or water bill, or utilities, stuff like that.  None of that was mentioned, because the custom is that those are simply pass-through fees to third parties.

 

Well, so is a broker fee.  A broker fee is not (generally) shared with the landlord, it’s paid to a third party.  Moreover, the legislature never specifically mentioned broker’s fees, and they certainly could have given how prominent a broker’s fee is in a transaction, and how much money is often involved.  And, generally speaking, if the legislature doesn’t specifically mention something in the legislation, there was a reason.

 

So why did DOS stretch to make an interpretation that a brokerage fee paid to the landlord agent, but not the landlord itself, is unacceptable?  I don’t know. But their reading is inconsistent with the exception they made to the $20 limit in cases where the condo or coop board has a separate fee.  In this case, DOS followed what I think is a fair reading of the law — they didn’t limit the board fee because that fee is legitimately collected by a third party, or at worst collected by the landlord to be passed through to the third party. So why treat board application fees different from broker fees?  They’re both collected by third parties for a service provided as part of the overall transaction.

 

Moreover, the DOS had a number of far less intrusive ways of adhering to the purpose of the legislation without completely unending a pretty well-established and unchallenged industry practice. For example, if the actual purpose of the legislation was to prevent the landlord from collecting more than the equivalent of one month’s rent, why not simply prohibit a broker from SHARING a broker’s fee with the landlord, or kicking it back to the landlord. Or prevent brokers from collecting a fee if there is cross-ownership between the broker and the landlord (which comes up a lot).

 

The point of the legislation was to limit the LANDLORD to the equivalent of one month’s rent. Nothing in the legislation is written to limit legitimate THIRD PARTIES from collecting fees from the tenant for services rendered.

 

Now, maybe I’m missing something. I’ve spent a lot of time parsing the 2019 landlord tenant act, and I know it pretty well. But I’m not writing a brief or a law review article here — this is just an informal opinion.  So if I’m missing something, and someone points out to me clear indications of legislative intent showing that the legislature meant to bar landlord brokers from collecting fees from tenants, then I’ll revise and update this post accordingly. Indeed, I welcome corrections if I’ve made a mistake.

 

Conclusion

Again, if this is the new rule, we will adjust. I wish they’d given us a little warning, and put an effective date on the guidance, but that ship has sailed.

 

To be clear, I’m not against the legislation as a whole. I think the legislature out in some needed protections for tenants, even though I think some of the provisions are going to hurt good landlords more than bad ones. I think the law could use some tweaking, but I know what they were trying to do, and they were well-intentioned.

 

Moreover, I’m not anti-regulation. I’m a lawyer. I like rules, particularly clear ones. I have had a good working relationship with DOS over a long period of time. I respect what they do, and I value the work DOS does to regulate this industry and protect consumers.  But I’m just puzzled why the DOS came to this particular conclusion, and announced in this peculiar way, when I don’t think they had to.

 


Posted on February 8, 2020 at 8:46 pm
Joseph Rand | Posted in Landlord-Tenant Law, Law | Tagged , , , ,

Client Advisory: Tenants Can No Longer Be Required to Pay a Landlord’s Brokerage Fee

Dear Clients,

Please be advised that on February 5, 2020, the Department of State announced that landlords can no longer require tenants to pay brokerage fees to a broker/agent representing the landlord.  You can find the Department’s statement here.

Please note that this only applies to a broker/agent representing the landlord. If the broker/agent represents the tenant, and has a representation agreement that sets out a brokerage fee to be paid by the tenant, then the broker/agent can be paid by its tenant client.  Similarly, the landlord can pay the landlord’s agent, and, if the landlord wishes, the tenant’s agent as well. But the landlord’s broker/agent CANNOT be paid by the tenant.

The Department did not make clear whether this new rule applies to leases that were agreed to prior to February 5th, 2020.  Other parts of the Department’s statement do indicate that the Department’s new interpretation is not intended to apply to existing leases. Thus, we are interpreting it to apply to leases signed as of today, February 6, 2020, the first business day after the announcement was made. We will advise you if we get contrary guidance from the state.

Accordingly, as of February 6, 2020:

Landlords:  if you are a landlord, you need to pay the brokerage fee to your own agent. You can also pay the tenant’s agent if you wish, although you do not need to.  But you cannot compel the tenant to pay your landlord’s agent. Essentially, if you want to list your property for rent, you need to at least compensate your own agent. You should also consider compensating a tenant’s agent, the way sellers do in residential sales, in order to incentivize them to bring you a tenant.  You can always build the cost of the compensation into your monthly rent.

Tenants: if you are a tenant, you do not have to pay a brokerage fee to a broker representing the landlord. You might still need to pay your own tenant’s agent, if you have one, pursuant to a separate agreement. If you’re working with a tenant’s agent, that agent deserves to be paid for their work.

Please note that if you have an existing agreement in principle to lease a property that requires the tenant to pay a brokerage fee to the landlord’s agent, but that agreement is not yet signed, then that agreement must be modified to comply with this new interpretation in the law.  The landlord needs to pay its own broker.  That might mean, of course, that the landlord might require an adjustment of the monthly rent due over the course of the lease.

We hope you find this helpful. If you have questions, please reach out through your Rand Realty agent.

NOTE:  I am an attorney, but I am not your attorney. I represent Better Homes and Gardens Real Estate |Rand  Realty.  If you would like to discuss the matter discussed here with an attorney, you should do so. 

 


Posted on February 6, 2020 at 6:55 pm
Joseph Rand | Posted in Client Advisory, Landlord-Tenant Law, Law | Tagged , , , ,

Agent Advisory: Understanding the New Guidance from the Department of State about Agent Obligations Under the New Landlord-Tenant Laws

On February 5th, the Department of State put out an advisory providing guidance on agent responsibilities under the Housing Stability and Tenant Protection Act of 2019.

That legislation was a far-reaching and progressive set of changes to the landlord-tenant relationship, providing significant new protections to tenants, including the following:

  1. Landlords cannot refuse to rent to someone based on their lawful source of income, or because that tenant was involved in a past or pending landlord-tenant action.
  2. Landlords cannot charge an application fee, or more than a $20 for a background/credit check.
  3. Landlords must give the tenant the opportunity to inspect the premises prior to occupancy, and execute a written agreement describing the condition of the premises.
  4. Landlords cannot require more than an amount equal to one month’s rent as an upfront payment to cover all deposits and fees.
  5. Landlords cannot require tenant’s to pay any part of the brokerage fee due the landlord’s agent.
  6. Landlords must inspect the premises prior to termination of the lease and notify the tenant of any repairs or cleaning that must be done, and can only keep a part of the security deposit if they provide an itemized statement explaining why.
  7. Landlords can only charge late payment fees if a rent payment is more than 5 days late, and can only charge 5% of the monthly rent, capped at $50.
  8. Landlords must give tenants between 30-90 days’ notice prior to lease expiration of their intent not to renew or to raise the rent by more than 5%.
  9. If the tenant breaches the lease, Landlords must act in good faith to mitigate the damages by finding a new tenant as soon as possible.
  10. Landlords have significant restrictions on their rights to evict tenants – we’re not going to review them here except to say that landlords should consult with an attorney about any attempt to effect an eviction.

Agents should be familiar with these new laws, because landlords might not be, and you will need to guide them so that they don’t inadvertently break the law.

Moreover, agents also need to be aware that the Department of State has put affirmative obligations on them to help landlords comply with the new laws.

The DOS guidance is a little dis-organized and confusing, though, so we’ve tried to make sense of it for you.  Essentially, in all these cases, you must advise the landlord to comply with the law, and cannot be a part of any non-compliance regarding the following obligations:

  1.  Brokerage Fees for the Landlord’s Agent Cannot be Paid by Tenant

If you represent the landlord, the landlord has to pay your fee. The landlord cannot compel the tenant to pay any part of the fee.

  1. Brokerage Fees for the Tenant’s Agent Can be Paid by Landlord, Listing Broker, or Tenant

If you represent the tenant, you can get paid in these ways:

  • your tenant can pay your fee pursuant to a separate representation agreement.
  • the landlord (or listing broker) can pay your fee pursuant to a standard offer of compensation in MLS.
  • the landlord can pay your fee, even if no offer of compensation was made in MLS, if the tenant requires the landlord to pay your fee as a condition of the lease.
  1. One Month Rent Cap on Upfront/Advance Fees or Rent.

You cannot be party to a landlord charging more than a month’s worth of rent in upfront fees to cover a security deposit, advance rent, pet deposits, or the like.  Essentially, this allows a landlord to require a tenant to pay one full month’s rent as a security deposit, and that’s it.  No pet deposits, no “last month’s rent,” no broker’s fee, nothing.  This includes short-term rentals, which sometimes require pre-paid rent for a full term – that is no longer allowed, because under no circumstances can a landlord require a tenant to pre-pay anything more than one month’s worth of rent.

  1. Application Fee.

You cannot be party to a landlord charging more than $20 for an application fee to cover a background/credit check. Moreover, if the potential tenant provides a copy of a background check or credit check conducted within the past 30 days, the landlord has to waive any application fee.

Note that DOS has carved out some further guidance on this:

  • condo and coop boards can charge a separate application fee, so long as they don’t own the unit being rented (or pay the money to the landlord in any way).
  • if there are multiple individuals who are taking on the tenancy, brokers and landlords can charge a $20 fee (if otherwise allowed) from each of the individual tenants.
  • if you collect a fee, you have to provide the tenant with a copy of any background or credit check.
  • you can require the tenant to use a specific company to get the background or credit check, so long as you otherwise comply with the $20 limitation and fee waiver if the tenant has a credit or background check from the last 30 days.
  • the $20 rule applies to subletting tenants (i.e., sublandlords) the same way it applies to landlords.
  1. Prior Disputes.

You cannot allow a landlord to refuse to rent or offer a lease to a potential tenant because that tenant was previously involved in a dispute with a landlord.  You can still ask a tenant for references, but you cannot ask the references whether the tenant has any past or pending landlord-tenant actions.

  1. Late Rent Fees.

You cannot allow a landlord to charge a tenant more than 5% of the monthly rent (capped at $50) as a late fee, which can only be charged if the rent is more than five days late.

  1. Security Deposit Return.

You cannot be party to a landlord holding a security deposit without complying with the new requirements of notice and itemization of damages.

 

We hope you find this helpful.  We will be updating this Advisory if we get more guidance, or find that it needs some clarification.

JR

 


Posted on February 6, 2020 at 6:16 pm
Joseph Rand | Posted in Agent Advisory, Landlord-Tenant Law, Law | Tagged , , , , , , ,