Legal Question in Real Estate Law in New York
Broker took my deposit, then sold to higher bidder
I recently made a bid on a handyman's special for $15,500. The bid was accepted and the broker required I give him a deposit and sign a contract which he would give to the seller to sign. The next day after giving the broker the deposit he informed me that he accepted another bid for $16,500 and upon asking the seller, who I know, she was never shown the contract I had signed. My question being since the broker already had accepted my bid and taken my deposit can he legally continue to accept bids? I also found out that he also had the higher bidder's deposit as well. If this is not legal, what course of action can I take? Thank you.
1 Answer from Attorneys
Re: Broker took my deposit, then sold to higher bidder
Depends on whether the Broker was a Buyer's agent (yours) or Seller's agent (theirs).
NY law requires the agent to complete and deliver an Agency Disclosure form to the customer for which you must acknowledge by your signature. Did the Broker provide this to you?
In short, if the Broker represented the Seller, they did not breach any duty to you (except to treat you fairly). Thus, it may have seemed unethical but not illegal.
The contract was not binding until the Seller signed it.
Your only recourse is to file a complaint with the Dept of State Licensing Division if you did not receive the Disclosure.
(If the agent was YOUR agent, you may have a breach of contract/fiduciary responsibility action against Agent).
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