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Judge grants temporary restraining order allowing New York brokers to charge tenants fees

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For the time being, prospective tenants in New York City will still have to supply a broker’s fee.

A New York judge granted a temporary restraining order against the Department of State’s guidance that would have shifted the broker’s fee responsibility from the tenant to the landlord.

Last summer, New York State passed two acts that were designed to help renters: Housing Security & Tenant Protection Act of 2019 and the Housing Stability & Tenant Protection Act of 2019. Recently, the New York Department of State issued clarifications to these two acts — under these new protections, if the landlord employs the help of a broker to get an apartment rented, the broker’s fee, which was previously paid by the tenants upon moving in, will now have to be paid by the landlord renting out the apartment.

According to the Real Deal, a petition was filed on Monday morning in Albany by the Real Estate Board of New York (REBNY), New York Association of Realtors and a dozen New York brokerage firms against the Department of State’s guidance, calling the move “misguided and harmful” in a statement

The decision is expected to stay in place until March 13, where REBNY indicated on Twitter that would be returning to court for the next phase of their lawsuit.

“The entry today by the Court in Albany of an order temporarily halting the implementation of New York State Department of State’s (DOS) interpretation of the Statewide Housing Stability and Tenant Protection Act means that thousands of hardworking, honest real estate agents across New York State can do business in the same way they did prior to last week’s DOS memo without fear of discipline by the DOS,” said  REBNY President, James Whelan and New York State Association of Realtors President, Jennifer Stevenson in a joint statement. “We look forward to ultimately resolving this matter in Court in the weeks ahead. Meanwhile, we appreciate all of our members’ support and vigilance during this period of upheaval and confusion. We also want to thank Claude Szyfer and his team at Stroock & Stroock & Lavan LLP for their tireless efforts on this matter.”

Emily Davenport