Legal Question in Real Estate Law in New York
Real Estate Broker Commissions on a Rental House
I'm renting a house for one year with an option for a second year. The broker has said that I owe one month's rent as commission for the first year and one-half of one month's rent for the second year, if I exercise the option for the second year. I have no problem with the commission on the first year. But what about the second year? Someone told me that a recent case in the Hamptons said such additional commission for a second year of renting is not legal. Is there any truth to this?
Thanks alot for your help.
1 Answer from Attorneys
Broker's Commission
Without further facts and without reading the agreement, I cannot advise you specifically. Here are some general concepts:
It is the practice in New York for real estate brokers to receive commissions pursuant to a written agreement. If there is such an agreement, its terms control, unless it is ambiguous. I would obtain a copy of that agreement, and read it.
Often you can vary the results of the law if you and the other party to a contract agree in a writing, unless the contract is somehow against public policy. That would not seem to be the case here, so notwithstanding a case covering a similar situation, you may have signed a contract which gives the broker rights which s/he would not otherwise have had under the law. If you had an attorney review the lease agreement, you might go back to that attorney and ask him/her about this case you mention.
If what you have is an oral agreement with the broker about the fee, you seem to have an ambiguity. Generally speaking, a contract which involves an interest in real estate is required to be in writing under NY law. But brokers know their business, and usually put their agreements in writing, so I am guessing that you have a written agreement.
Good luck; I hope the house is lovely!