When I rented out my condo through a major NYC real estate firm, they had me sign an "exclusivity to rent" contract. However, buried within this contract was a clause that states that they also have exclusivity to the sale in the event that the apartment is sold to the tenant. Not remembering this, I sold to my tenant. Now the company's legal team is coming after me for 6% of the sales price, even though they did nothing to help the sale. Is this type of contract standard, and do I have any recourse?
Not only is the kind of clause standard common in rental contracts, but you're most likely on the hook for that broker's fee, say our experts.
"[This clause] is fairly standard in most rental exclusive agreements," says Corcoran broker Deanna Kory. She adds, "If there is no time limit listed on the agreement, then you likely owe the commission."
Sotheby's International Realty broker Gordon T. Roberts agrees, though he says there is often a time limit of six months. In a sample of this type of lease, he says the contract essentially states that if you sell to the renter within 180 days from when the lease was signed, the brokerage gets a 6% commission.
To parse the terms of the specific agreement you signed, says Roberts, your best bet is to take it to a lawyer to determine exactly what it was you agreed to -- and if you are, indeed, legally bound to cough up cash to your brokerage, or might have a valid argument otherwise.
"You could also be liable for their costs for enforcing the terms, including attorney fees," Roberts adds. Consider this a very harsh lesson in the importance of reading the fine print.
Virginia K. Smith is the senior editor at BrickUnderground.com, the online survival guide to finding a NYC apartment and living happily ever after. To see more expert answers or to ask a real estate question, click here.