Prior to the revisions to Section 443 of the Real Property Law, only one agency relationship disclosure form was required for buyer/seller and landlord/tenant transactions. The combined form used the terms "seller/landlord" and"buyer/tenant" interchangeably. On and after January 1, 2007, the combined form will no longer be permitted and, rather, two separate disclosure forms will be required; one for seller/buyer transactions and another for landlord/tenant transactions. The two forms provide expanded, clearer definitions of the different agency relationships and explain the fiduciary duties owed by brokers and salespeople under each type of agency relationship.
The revised statute also defines dual agency. While the concept of dual agency is not new, Real Property Law, Section 443 now provides a clear definition of this type of agency relationship. A dual agent is defined by the revised statute as, "an agent who is acting as a buyer’s agent and a seller’s agent in the same transaction."
The revised statute also adds a definition for "designated sales associate." A designated sales associate is defined by the statute as: " a licensed real estate salesman or associate broker, working under the supervision of a real estate broker, who has been assigned to represent a client when a different client is also represented by such real estate broker in the same transaction." Essentially, a broker who is acting as a dual agent will be permitted to appoint two different real estate salespersons and/or associate brokers to represent each party to the transaction. The representative broker is still required to provide supervision to the designated sales associates. For this reason, and as in a pure dual agency situation, when designated sales associates are appointed, the consumers are not afforded all of the fiduciary duties inherent in a single agency arrangement. Specifically, the designated sales associate and representative broker cannot provide the fiduciary duty of undivided loyalty. The new agency disclosure form contains a disclaimer to this fact.
The link to these two disclosure forms is at www.dos.state.ny.us/lcns/realestate/index.html. In accordance with statute, each is required to be printed on a one page, two-sided form.
Text of the Revised Statute
(Bill A4135-C)
AN ACT to amend the real property law, in relation to the real estate agency disclosure form and to repeal subdivision 4 of section 443 of such law relating thereto The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 1 of section 443 of the real property law is amended by adding two new paragraphs i and j to read as follows:
i. "Dual agent" means an agent who is acting as a buyer's agent and a seller's agent in the same transaction.
j. "Designated sales associate" means a licensed real estate salesman or associate broker, working under the supervision of a real estate broker, who has been assigned to represent a client when a different client is also represented by such real estate broker in the same transaction.
§ 2. Subdivision 4 of section 443 of the real property law is REPEALED and a new subdivision 4 is added to read as follows:
4. a. For buyer-seller transactions, the following shall be the disclosure form:
NEW YORK STATE DISCLOSURE FORM
FOR
BUYER AND SELLER
THIS IS NOT A CONTRACT
New York state law requires real estate licensees who are acting as agents of buyers or sellers of property to advise the potential buyers or sellers with whom they work of the nature of their agency relationship and the rights and obligations it creates. This disclosure will help you to make informed choices about your relationship with the real estate broker and its sales associates. Throughout the transaction you may receive more than one disclosure form. The law requires each agent assisting in the transaction to present you with this disclosure form. A real estate agent is a person qualified to advise about real estate. If you need legal, tax or other advice, consult with a professional in that field.
DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIPS
SELLER'S AGENT
A seller's agent is an agent who is engaged by a seller to represent the seller's interests. The seller's agent does this by securing a buyer for the seller's home at a price and on terms acceptable to the seller. A seller's agent has, without limitation, the following fiduciary duties to the seller: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A seller's agent does not represent the interests of the buyer. The obligations of a seller's agent are also subject to any specific provisions set forth in an agreement between the agent and the seller. In dealings with the buyer, a seller's agent should (a) exercise reasonable skill and care in performance of the agent's duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law.
BUYER'S AGENT
A buyer's agent is an agent who is engaged by a buyer to represent the buyer's interests. The buyer's agent does this by negotiating the purchase of a home at a price and on terms acceptable to the buyer. A buyer's agent has, without limitation, the following fiduciary duties to the buyer: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A buyer's agent does not represent the interests of the seller. The obligations of a buyer's agent are also subject to any specific provisions set forth in an agreement between the agent and the buyer. In dealings with the seller, a buyer's agent should (a) exercise reasonable skill and care in performance of the agent's duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the buyer's ability and/or willingness to perform a contract to acquire seller's property that are not inconsistent with the agent's fiduciary duties to the buyer.
BROKER'S AGENTS
As part of your negotiations with a real estate agent, you may authorize your agent to engage other agents whether you are a buyer or seller. As a general rule, those agents owe fiduciary duties to your agent and to you. You are not vicariously liable for their conduct.
DUAL AGENT
A real estate broker may represent both the buyer and the seller if both the buyer and seller give their informed consent in writing. In such a dual agency situation, the agent will not be able to provide the full range of fiduciary duties to the buyer and seller. The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent, and the buyer and seller. An agent acting as a dual agent must explain carefully to both the buyer and seller that the agent is acting for the other party as well. The agent should also explain the possible effects of dual representation, including that by consenting to the dual agency relationship the buyer and seller are giving up their right to undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship before agreeing to such representation.
DUAL AGENCY
WITH
DESIGNATED SALES ASSOCIATES
If the buyer and the seller provide their informed consent in writing, the principals or the real estate broker who represents both parties as a dual agent may designate a sales associate to represent the buyer and another sales associate to represent the seller to negotiate the purchase and sale of real estate. A sales associate works under the supervision of the real estate broker. With the informed consent of the buyer and the seller in writing, the designated sales associate for the buyer will function as the buyer's agent representing the interests of the buyer and the designated sales associate for the seller will function as the seller's agent representing the interests of the seller in the negotiations between the buyer and seller. A designated sales associate cannot provide the full range of fiduciary duties to the buyer or seller. The designated sales associate must explain that like the dual agent under whose supervision they function, they cannot provide undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship with designated sales associates before agreeing to such representation.
This form was provided to me by the company named below:
Licensee or Associate of Licensee:___________________(signature) of
Company:___________________________________________________
The above-named company, which is licensed as a real estate broker, is(check one)
[ ] the seller's agent [ ] a dual agent
[ ] the buyer's agent [ ] a dual agent with designated sales associates
[ ] the broker's agent
If dual agent with designated sales associates is checked:
is appointed to represent the buyer; and
is appointed to represent the seller in this transaction.
(I)(We) acknowledge receipt of a copy of this disclosure form:
Signature of [ ] Buyer(s) and/or [ ] Seller(s):
____________________ ____________________
____________________ ____________________
Date:_______________ Date:_______________
b. For landlord-tenant transactions, the following shall be the disclosure form:
NEW YORK STATE DISCLOSURE FORM
FOR
LANDLORD AND TENANT
THIS IS NOT A CONTRACT
New York state law requires real estate licensees who are acting as agents of landlords and tenants of real property to advise the potential landlords and tenants with whom they work of the nature of their agency relationship and the rights and obligations it creates. This disclosure will help you to make informed choices about your relationship with the real estate broker and its sales associates. Throughout the transaction you may receive more than one disclosure form. The law requires each agent assisting in the transaction to present you with this disclosure form. A real estate agent is a person qualified to advise about real estate. If you need legal, tax or other advice, consult with a professional in that field.
DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIPS
LANDLORD'S AGENT
A landlord's agent is an agent who is engaged by a landlord to represent the landlord's interest. The landlord's agent does this by securing a tenant for the landlord's apartment or house at a rent and on terms acceptable to the landlord. A landlord's agent has, without limitation, the following fiduciary duties to the landlord: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A landlord's agent does not represent the interests of the tenant. The obligations of a landlord's agent are also subject to any specific provisions set forth in an agreement between the agent and the landlord. In dealings with the tenant, a landlord's agent should (a) exercise reasonable skill and care in performance of the agent's duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law.
TENANT'S AGENT
A tenant's agent is an agent who is engaged by a tenant to represent the tenant's interest. The tenant's agent does this by negotiating the rental or lease of an apartment or house at a rent and on terms acceptable to the tenant. A tenant's agent has, without limitation, the following fiduciary duties to the tenant: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A tenant's agent does not represent the interest of the landlord. The obligations of a tenant's agent are also subject to any specific provisions set forth in an agreement between the agent and the tenant. In dealings with the landlord, a tenant's agent should (a) exercise reasonable skill and care in performance of the agent's duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law.
BROKER'S AGENTS
As part of your negotiations with a real estate agent, you may authorize your agent to engage other agents whether you are a landlord or tenant. As a general rule, those agents owe fiduciary duties to your agent and to you. You are not vicariously liable for their conduct.
DUAL AGENT
A real estate broker may represent both the tenant and the landlord if both the tenant and landlord give their informed consent in writing. In such a dual agency situation, the agent will not be able to provide the full range of fiduciary duties to the landlord and the tenant. The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent, and the tenant and landlord. An agent acting as a dual agent must explain carefully to both the landlord and tenant that the agent is acting for the other party as well. The agent should also explain the possible effects of dual representation, including that by consenting to the dual agency relationship the landlord and tenant are giving up their right to undivided loyalty. A landlord and tenant should carefully consider the possible consequences of a dual agency relationship before agreeing to such representation.
DUAL AGENT
WITH
DESIGNATED SALES ASSOCIATES
If the tenant and the landlord provide their informed consent in writing, the principals or the real estate broker who represents both parties as a dual agent may designate a sales associate to represent the tenant and another sales associate to represent the landlord. A sales associate works under the supervision of the real estate broker. With the informed consent in writing of the tenant and the landlord, the designated sales associate for the tenant will function as the tenant's agent representing the interests of the tenant and the designated sales associate for the landlord will function as the landlord's agent representing the interests of the landlord in the negotiations between the tenant and the landlord. A designated sales associate cannot provide the full range of fiduciary duties to the landlord or tenant. The designated sales associate must explain that like the dual agent under whose supervision they function, they cannot provide undivided loyalty. A landlord or tenant should carefully consider the possible consequences of a dual agency relationship with designated sales associates before agreeing to such representation. This form was provided to me by the company named below:
Licensee or Associate of Licensee: ___________________ (signature) of
Company: ____________________________________________________________
The above-named company, which is licensed as a real estate broker, is
(check one)
[ ] the landlord's agent [ ] a dual agent
[ ] the tenant's agent [ ] a dual agent with designated sales associates
[ ] the broker's agent
If dual agent with designated sales associates is checked:
is appointed to represent the tenant; and
is appointed to represent the landlord in this transaction.
(I) (We) acknowledge receipt of a copy of this disclosure form:
Signature of [ ] Landlord(s) and/or [ ] Tenant(s):
_______________________________________________________
_______________________________________________________
Date: _______________ Date: ________________
c. The buyer-seller form and the landlord-tenant form shall each be a one page, two-sided form, printed front and back.
§ 3. This act shall take effect January 1, 2007.
Revisions to the Agency Disclosure Requirements for New York State
Section 443 of the real property law was previously amended to require two separate disclosure forms to be used; one for seller/buyer transactions and another for landlord/tenant transactions. These new forms provided expanded, clearer definitions of the different agency relationships and explain the fiduciary duties owed by brokers and salespeople under each type of agency relationship. The statute also added the definitions for “designated sales associate” and “dual agency”. These changes became effective on January 1, 2007.
The new statute, effective January 1, 2008, further amends section 443 of the real property law regarding the disclosure of real estate agency relationships. The amendments include: changes to definitions; the removal of the acknowledgment requirement; and changes to the wording on both the Buyer and Seller disclosure form and the landlord and Tenant disclosure form. In addition, the requirement that the disclosure forms each be a one page, two sided form, printed front and back is removed.
A link to the amended disclosure forms is available at: http://www.dos.state.ny.us/lcns/realest.html.
Text of the Revised Statute
(Bill A05089)
S T A T E O F N E W Y O R K
________________________________________________________________________
5089--A
Cal. No. 844
2007-2008 Regular Sessions
I N S E N A T E
April 25, 2007
___________
Introduced by Sen. DeFRANCISCO -- read twice and ordered printed, and
when printed to be committed to the Committee on Judiciary -- reported
favorably from said committee, ordered to first and second report,
ordered to a third reading, amended and ordered reprinted, retaining
its place in the order of third reading
AN ACT to amend the real property law, in relation to disclosure regard-
ing real estate agency relationship
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Section 443 of the real property law, as added by chapter
2 726 of the laws of 1991, paragraphs i and j of subdivision 1 and subdi-
3 vision 4 as added by chapter 569 of the laws of 2006, subdivision 3 as
4 amended by chapter 469 of the laws of 1993, is amended to read as
5 follows:
6 S 443. Disclosure regarding real estate agency relationship; form. 1.
7 Definitions. As used in this section, the following terms shall have the
8 following meanings:
9 a. "Agent" means a person who is licensed as a real estate broker or
10 real estate sales associate under section {440-a} FOUR HUNDRED FORTY-A
11 of this article and is acting in a fiduciary capacity.
12 b. "Buyer" means a transferee {or lessee} in a residential real prop-
13 erty transaction and includes a person who executes an offer to purchase
14 {or to lease} residential real property from a seller through an agent,
15 or who has engaged the services of an agent with the object of entering
16 into a residential real property transaction as a transferee {or
17 lessee}.
18 c. "Buyer`s agent" means an agent who contracts to locate residential
19 real property for a buyer or who finds a buyer for a property and
20 presents an offer to purchase to the seller or seller`s agent and nego-
21 tiates on behalf of the buyer.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
{ } is old law to be omitted.
LBD11602-04-7
S. 5089--A 2
1 d. "Listing agent" means a person who has entered into a listing
2 agreement to act as an agent of the seller OR LANDLORD for compensation.
3 e. "Listing agreement" means a contract between an owner or owners of
4 residential real property and an agent, by which the agent has been
5 authorized to sell or lease the residential real property or to find or
6 obtain a buyer or lessee therefor.
7 f. "Residential real property" means real property improved by a one-
8 to-four family dwelling used or occupied, or intended to be used or
9 occupied, wholly or partly, as the home or residence of one or more
10 persons, but shall not refer to (i) unimproved real property upon which
11 such dwellings are to be constructed or (ii) condominium or cooperative
12 apartments in a building containing more than four units.
13 g. "Seller" means the transferor {or lessor} in a residential real
14 property transaction, and includes an owner who lists residential real
15 property for sale {or lease} with an agent, whether or not a transfer
16 {or lease} results, or who receives an offer to purchase {or lease}
17 residential real property.
18 h. "Seller`s agent" means a listing agent who acts alone, or an agent
19 who acts in cooperation with a listing agent, acts as a seller`s suba-
20 gent or acts as a broker`s agent to find or obtain a buyer for residen-
21 tial real property.
22 i. "Dual agent" means an agent who is acting as a buyer`s agent and a
23 seller`s agent OR A TENANT`S AGENT AND A LANDLORD`S AGENT in the same
24 transaction.
25 j. "Designated sales {associate} AGENT" means a licensed real estate
26 salesman or associate broker, working under the supervision of a real
27 estate broker, who has been assigned to represent a client when a
28 different client is also represented by such real estate broker in the
29 same transaction.
30 K. "BROKER`S AGENT" MEANS AN AGENT THAT COOPERATES OR IS ENGAGED BY A
31 LISTING AGENT, BUYER`S AGENT OR TENANT`S AGENT (BUT DOES NOT WORK FOR
32 THE SAME FIRM AS THE LISTING AGENT, BUYER`S AGENT OR TENANT`S AGENT) TO
33 ASSIST THE LISTING AGENT, BUYER`S AGENT OR TENANT`S AGENT IN LOCATING A
34 PROPERTY TO SELL, BUY OR LEASE RESPECTIVELY, FOR THE LISTING AGENT`S
35 SELLER OR LANDLORD, THE BUYER AGENT`S BUYER OR THE TENANT`S AGENT
36 TENANT. THE BROKER`S AGENT DOES NOT HAVE A DIRECT RELATIONSHIP WITH THE
37 SELLER, BUYER, LANDLORD OR TENANT AND THE SELLER, BUYER, LANDLORD OR
38 TENANT CAN NOT PROVIDE INSTRUCTIONS OR DIRECTION DIRECTLY TO THE
39 BROKER`S AGENT. THEREFORE, THE SELLER, BUYER, LANDLORD OR TENANT DO NOT
40 HAVE VICARIOUS LIABILITY FOR THE ACTS OF THE BROKER`S AGENT. THE LISTING
41 AGENT, BUYER`S AGENT OR TENANT`S AGENT DO PROVIDE DIRECTION AND INSTRUC-
42 TION TO THE BROKER`S AGENT AND THEREFORE THE LISTING AGENT, BUYER`S
43 AGENT OR TENANT`S AGENT WILL HAVE LIABILITY FOR THE BROKER`S AGENT.
44 L. "TENANT" MEANS A LESSEE IN A RESIDENTIAL REAL PROPERTY TRANSACTION
45 AND INCLUDES A PERSON WHO EXECUTES AN OFFER TO LEASE RESIDENTIAL REAL
46 PROPERTY FROM A LANDLORD THROUGH AN AGENT, OR WHO HAS ENGAGED THE
47 SERVICES OF AN AGENT WITH THE OBJECT OF ENTERING INTO A RESIDENTIAL REAL
48 PROPERTY TRANSACTION AS A LESSEE.
49 M. "LANDLORD" MEANS THE LESSOR IN A RESIDENTIAL REAL PROPERTY TRANS-
50 ACTION, AND INCLUDES AN OWNER WHO LISTS RESIDENTIAL REAL PROPERTY FOR
51 LEASE WITH AN AGENT, WHETHER OR NOT A LEASE RESULTS, OR WHO RECEIVES AN
52 OFFER TO LEASE RESIDENTIAL REAL PROPERTY.
53 N. "TENANT`S AGENT" MEANS AN AGENT WHO CONTRACTS TO LOCATE RESIDENTIAL
54 REAL PROPERTY FOR A TENANT OR WHO FINDS A TENANT FOR A PROPERTY AND
55 PRESENTS AN OFFER TO LEASE TO THE LANDLORD OR LANDLORD`S AGENT AND NEGO-
56 TIATES ON BEHALF OF THE TENANT.
S. 5089--A 3
1 O. "LANDLORD`S AGENT" MEANS A LISTING AGENT WHO ACTS ALONE, OR AN
2 AGENT WHO ACTS IN COOPERATION WITH A LISTING AGENT, ACTS AS A LANDLORD`S
3 SUBAGENT OR ACTS AS A BROKER`S AGENT TO FIND OR OBTAIN A TENANT FOR
4 RESIDENTIAL REAL PROPERTY.
5 2. This section shall apply only to transactions involving residential
6 real property.
7 3. a. A listing agent shall provide the disclosure form set forth in
8 subdivision four of this section to a seller OR LANDLORD prior to enter-
9 ing into a listing agreement with the seller OR LANDLORD and shall
10 obtain a signed acknowledgment from the seller OR LANDLORD, except as
11 provided in paragraph {f} E of this subdivision.
12 b. A seller`s agent OR LANDLORD`S AGENT shall provide the disclosure
13 form set forth in subdivision four of this section to a buyer {or},
14 buyer`s agent, TENANT OR TENANT`S AGENT at the time of the first
15 substantive contact with the buyer OR TENANT and shall obtain a signed
16 acknowledgement from the buyer OR TENANT, except as provided in para-
17 graph {f} E of this subdivision.
18 c. A buyer`s agent OR TENANT`S AGENT shall provide the disclosure form
19 to the buyer OR TENANT prior to entering into an agreement to act as the
20 buyer`s agent OR TENANT`S AGENT and shall obtain a signed acknowledgment
21 from the buyer OR TENANT, except as provided in paragraph {f} E of this
22 subdivision. A buyer`s agent OR TENANT`S AGENT shall provide the form
23 to the seller {or}, seller`s agent, LANDLORD OR LANDLORD`S AGENT at the
24 time of the first substantive contact with the seller OR LANDLORD and
25 shall obtain a signed acknowledgment from the seller, LANDLORD or the
26 {seller`s} listing agent, except as provided in paragraph {f} E of this
27 subdivision.
28 {d. The parties to a contract of purchase and sale shall sign the
29 acknowledgment of the parties to the contract. If attorneys for the
30 buyer and seller arrange for the preparation and execution of a
31 contract, the real estate licensees are not responsible for obtaining
32 the acknowledgement of the parties as required by this paragraph.
33 e.} D. The agent shall provide to the buyer {or}, seller, TENANT OR
34 LANDLORD a copy of the signed acknowledgment and shall maintain a copy
35 of the signed acknowledgment for not less than three years.
36 {f.} E. If the seller {or}, buyer, LANDLORD OR TENANT refuses to sign
37 an acknowledgment of receipt pursuant to this subdivision, the agent
38 shall set forth under oath or affirmation a written declaration of the
39 facts of the refusal and shall maintain a copy of the declaration for
40 not less than three years.
41 4. a. For buyer-seller transactions, the following shall be the
42 disclosure form:
43 NEW YORK STATE DISCLOSURE FORM
44 FOR
45 BUYER AND SELLER
46 THIS IS NOT A CONTRACT
47 New York state law requires real estate licensees who are acting as
48 agents of buyers or sellers of property to advise the potential buyers
49 or sellers with whom they work of the nature of their agency relation-
50 ship and the rights and obligations it creates. This disclosure will
51 help you to make informed choices about your relationship with the real
52 estate broker and its sales associates.
53 Throughout the transaction you may receive more than one disclosure
54 form. The law requires each agent assisting in the transaction to pres-
55 ent you with this disclosure form. A real estate agent is a person qual-
56 ified to advise about real estate.
S. 5089--A 4
1 If you need legal, tax or other advice, consult with a professional in
2 that field.
3 DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIPS
4 SELLER`S AGENT
5 A seller`s agent is an agent who is engaged by a seller to represent
6 the seller`s interests. The seller`s agent does this by securing a buyer
7 for the seller`s home at a price and on terms acceptable to the seller.
8 A seller`s agent has, without limitation, the following fiduciary duties
9 to the seller: reasonable care, undivided loyalty, confidentiality, full
10 disclosure, obedience and duty to account. A seller`s agent does not
11 represent the interests of the buyer. The obligations of a seller`s
12 agent are also subject to any specific provisions set forth in an agree-
13 ment between the agent and the seller. In dealings with the buyer, a
14 seller`s agent should (a) exercise reasonable skill and care in perform-
15 ance of the agent`s duties; (b) deal honestly, fairly and in good faith;
16 and (c) disclose all facts known to the agent materially affecting the
17 value or desirability of property, except as otherwise provided by law.
18 BUYER`S AGENT
19 A buyer`s agent is an agent who is engaged by a buyer to represent the
20 buyer`s interests. The buyer`s agent does this by negotiating the
21 purchase of a home at a price and on terms acceptable to the buyer. A
22 buyer`s agent has, without limitation, the following fiduciary duties to
23 the buyer: reasonable care, undivided loyalty, confidentiality, full
24 disclosure, obedience and duty to account. A buyer`s agent does not
25 represent the interests of the seller. The obligations of a buyer`s
26 agent are also subject to any specific provisions set forth in an agree-
27 ment between the agent and the buyer. In dealings with the seller, a
28 buyer`s agent should (a) exercise reasonable skill and care in perform-
29 ance of the agent`s duties; (b) deal honestly, fairly and in good faith;
30 and (c) disclose all facts known to the agent materially affecting the
31 buyer`s ability and/or willingness to perform a contract to acquire
32 seller`s property that are not inconsistent with the agent`s fiduciary
33 duties to the buyer.
34 BROKER`S AGENTS
35 {As part of your negotiations with a real estate agent, you may
36 authorize your agent to engage other agents whether you are a buyer or
37 seller. As a general rule, those agents owe fiduciary duties to your
38 agent and to you. You are not vicariously liable for their conduct.} A
39 BROKER`S AGENT IS AN AGENT THAT COOPERATES OR IS ENGAGED BY A LISTING
40 AGENT OR A BUYER`S AGENT (BUT DOES NOT WORK FOR THE SAME FIRM AS THE
41 LISTING AGENT OR BUYER`S AGENT) TO ASSIST THE LISTING AGENT OR BUYER`S
42 AGENT IN LOCATING A PROPERTY TO SELL OR BUY, RESPECTIVELY, FOR THE LIST-
43 ING AGENT`S SELLER OR THE BUYER AGENT`S BUYER. THE BROKER`S AGENT DOES
44 NOT HAVE A DIRECT RELATIONSHIP WITH THE BUYER OR SELLER AND THE BUYER OR
45 SELLER CAN NOT PROVIDE INSTRUCTIONS OR DIRECTION DIRECTLY TO THE
46 BROKER`S AGENT. THE BUYER AND THE SELLER THEREFORE DO NOT HAVE VICARIOUS
47 LIABILITY FOR THE ACTS OF THE BROKER`S AGENT. THE LISTING AGENT OR
48 BUYER`S AGENT DO PROVIDE DIRECTION AND INSTRUCTION TO THE BROKER`S AGENT
49 AND THEREFORE THE LISTING AGENT OR BUYER`S AGENT WILL HAVE LIABILITY FOR
50 THE ACTS OF THE BROKER`S AGENT.
51 DUAL AGENT
52 A real estate broker may represent both the buyer and the seller if
53 both the buyer and seller give their informed consent in writing. In
54 such a dual agency situation, the agent will not be able to provide the
55 full range of fiduciary duties to the buyer and seller. The obligations
56 of an agent are also subject to any specific provisions set forth in an
S. 5089--A 5
1 agreement between the agent, and the buyer and seller. An agent acting
2 as a dual agent must explain carefully to both the buyer and seller that
3 the agent is acting for the other party as well. The agent should also
4 explain the possible effects of dual representation, including that by
5 consenting to the dual agency relationship the buyer and seller are
6 giving up their right to undivided loyalty. A buyer or seller should
7 carefully consider the possible consequences of a dual agency relation-
8 ship before agreeing to such representation.
9 DUAL {AGENCY} AGENT
10 WITH
11 DESIGNATED SALES {ASSOCIATES} AGENTS
12 If the buyer and the seller provide their informed consent in writing,
13 the principals {or} AND the real estate broker who represents both
14 parties as a dual agent may designate a sales {associate} AGENT to
15 represent the buyer and another sales {associate} AGENT to represent the
16 seller to negotiate the purchase and sale of real estate. A sales {asso-
17 ciate} AGENT works under the supervision of the real estate broker. With
18 the informed consent of the buyer and the seller in writing, the desig-
19 nated sales {associate} AGENT for the buyer will function as the buyer`s
20 agent representing the interests of AND ADVOCATING ON BEHALF OF the
21 buyer and the designated sales {associate} AGENT for the seller will
22 function as the seller`s agent representing the interests of AND ADVO-
23 CATING ON BEHALF OF the seller in the negotiations between the buyer and
24 seller. A designated sales {associate} AGENT cannot provide the full
25 range of fiduciary duties to the buyer or seller. The designated sales
26 {associate} AGENT must explain that like the dual agent under whose
27 supervision they function, they cannot provide undivided loyalty. A
28 buyer or seller should carefully consider the possible consequences of a
29 dual agency relationship with designated sales {associates} AGENTS
30 before agreeing to such representation.
31 This form was provided to me by ____________________ (PRINT NAME OF
32 LICENSEE) OF ____________________________ (PRINT NAME OF COMPANY, FIRM
33 OR BROKERAGE), A LICENSED REAL ESTATE BROKER ACTING IN THE INTEREST OF
34 THE:
35 (___) SELLER AS A (CHECK RELATIONSHIP BELOW) _________ (____) BUYER AS
36 A (CHECK RELATIONSHIP BELOW)
37 _____ (____) SELLER`S AGENT ________________ (____) BUYER`S AGENT
38 _____ (____) BROKER`S AGENT ________________ (____) BROKER`S AGENT
39 _______________________ (____) DUAL AGENT ________________________
40 ___________ (___) DUAL AGENT WITH DESIGNATED SALES AGENTS ____________
41 {the company named below:
42 Licensee or Associate of Licensee:___________________(signature) of
43 Company:___________________________________________________
44 The above-named company, which is licensed as a real estate broker, is
45 (check one)
46 {} the seller`s agent {} a dual agent
47 {} the buyer`s agent {} a dual agent with designated sales
48 associates
49 {} the broker`s agent}
50 If dual agent with designated sales {associates} AGENTS
51 is checked:
52 ____________________ is appointed to represent the buyer; and
S. 5089--A 6
1 ____________________ is appointed to represent the seller in this
2 transaction.
3 (I)(We) acknowledge receipt of a copy of this disclosure form:
4 Signature of {} Buyer(s) and/or {} Seller(s):
5 ____________________ ____________________
6 ____________________ ____________________
7 Date:_______________ Date:_______________
8 b. For landlord-tenant transactions, the following shall be the
9 disclosure form:
10 NEW YORK STATE DISCLOSURE FORM
11 FOR
12 LANDLORD AND TENANT
13 THIS IS NOT A CONTRACT
14 New York state law requires real estate licensees who are acting as
15 agents of landlords and tenants of real property to advise the potential
16 landlords and tenants with whom they work of the nature of their agency
17 relationship and the rights and obligations it creates. This disclosure
18 will help you to make informed choices about your relationship with the
19 real estate broker and its sales associates.
20 Throughout the transaction you may receive more than one disclosure
21 form. The law requires each agent assisting in the transaction to pres-
22 ent you with this disclosure form. A real estate agent is a person qual-
23 ified to advise about real estate.
24 If you need legal, tax or other advice, consult with a professional in
25 that field.
26 DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIPS
27 LANDLORD`S AGENT
28 A landlord`s agent is an agent who is engaged by a landlord to repre-
29 sent the landlord`s interest. The landlord`s agent does this by securing
30 a tenant for the landlord`s apartment or house at a rent and on terms
31 acceptable to the landlord. A landlord`s agent has, without limitation,
32 the following fiduciary duties to the landlord: reasonable care, undi-
33 vided loyalty, confidentiality, full disclosure, obedience and duty to
34 account. A landlord`s agent does not represent the interests of the
35 tenant. The obligations of a landlord`s agent are also subject to any
36 specific provisions set forth in an agreement between the agent and the
37 landlord. In dealings with the tenant, a landlord`s agent should (a)
38 exercise reasonable skill and care in performance of the agent`s duties;
39 (b) deal honestly, fairly and in good faith; and (c) disclose all facts
40 known to the agent materially affecting the value or desirability of
41 property, except as otherwise provided by law.
42 TENANT`S AGENT
43 A tenant`s agent is an agent who is engaged by a tenant to represent
44 the tenant`s interest. The tenant`s agent does this by negotiating the
45 rental or lease of an apartment or house at a rent and on terms accepta-
46 ble to the tenant. A tenant`s agent has, without limitation, the follow-
47 ing fiduciary duties to the tenant: reasonable care, undivided loyalty,
48 confidentiality, full disclosure, obedience and duty to account. A
49 tenant`s agent does not represent the interest of the landlord. The
50 obligations of a tenant`s agent are also subject to any specific
S. 5089--A 7
1 provisions set forth in an agreement between the agent and the tenant.
2 In dealings with the landlord, a tenant`s agent should (a) exercise
3 reasonable skill and care in performance of the agent`s duties; (b) deal
4 honestly, fairly and in good faith; and (c) disclose all facts known to
5 the {agent materially affecting the value or desirability of property,
6 except as otherwise provided by law} TENANT`S ABILITY AND/OR WILLINGNESS
7 TO PERFORM A CONTRACT TO RENT OR LEASE LANDLORD`S PROPERTY THAT ARE NOT
8 INCONSISTENT WITH THE AGENT`S FIDUCIARY DUTIES TO THE BUYER.
9 BROKER`S AGENTS
10 {As part of your negotiations with a real estate agent, you may
11 authorize your agent to engage other agents whether you are a landlord
12 or tenant. As a general rule, those agents owe fiduciary duties to your
13 agent and to you. You are not vicariously liable for their conduct.}
14 A BROKER`S AGENT IS AN AGENT THAT COOPERATES OR IS ENGAGED BY A LIST-
15 ING AGENT OR A TENANT`S AGENT (BUT DOES NOT WORK FOR THE SAME FIRM AS
16 THE LISTING AGENT OR TENANT`S AGENT) TO ASSIST THE LISTING AGENT OR
17 TENANT`S AGENT IN LOCATING A PROPERTY TO RENT OR LEASE FOR THE LISTING
18 AGENT`S LANDLORD OR THE TENANT AGENT`S TENANT. THE BROKER`S AGENT DOES
19 NOT HAVE A DIRECT RELATIONSHIP WITH THE TENANT OR LANDLORD AND THE
20 TENANT OR LANDLORD CAN NOT PROVIDE INSTRUCTIONS OR DIRECTION DIRECTLY TO
21 THE BROKER`S AGENT. THE TENANT AND THE LANDLORD THEREFORE DO NOT HAVE
22 VICARIOUS LIABILITY FOR THE ACTS OF THE BROKER`S AGENT. THE LISTING
23 AGENT OR TENANT`S AGENT DO PROVIDE DIRECTION AND INSTRUCTION TO THE
24 BROKER`S AGENT AND THEREFORE THE LISTING AGENT OR TENANT`S AGENT WILL
25 HAVE LIABILITY FOR THE ACTS OF THE BROKER`S AGENT.
26 DUAL AGENT
27 A real estate broker may represent both the tenant and the landlord if
28 both the tenant and landlord give their informed consent in writing. In
29 such a dual agency situation, the agent will not be able to provide the
30 full range of fiduciary duties to the landlord and the tenant. The obli-
31 gations of an agent are also subject to any specific provisions set
32 forth in an agreement between the agent, and the tenant and landlord.
33 An agent acting as a dual agent must explain carefully to both the land-
34 lord and tenant that the agent is acting for the other party as well.
35 The agent should also explain the possible effects of dual represen-
36 tation, including that by consenting to the dual agency relationship the
37 landlord and tenant are giving up their right to undivided loyalty. A
38 landlord and tenant should carefully consider the possible consequences
39 of a dual agency relationship before agreeing to such representation.
40 DUAL AGENT
41 WITH
42 DESIGNATED SALES {ASSOCIATES} AGENTS
43 If the tenant and the landlord provide their informed consent in writ-
44 ing, the principals {or} AND the real estate broker who represents both
45 parties as a dual agent may designate a sales {associate} AGENT to
46 represent the tenant and another sales {associate} AGENT to represent
47 the landlord. A sales {associate} AGENT works under the supervision of
48 the real estate broker. With the informed consent in writing of the
49 tenant and the landlord, the designated sales {associate} AGENT for the
50 tenant will function as the tenant`s agent representing the interests of
S. 5089--A 8
1 AND ADVOCATING ON BEHALF OF the tenant and the designated sales {associ-
2 ate} AGENT for the landlord will function as the landlord`s agent
3 representing the interests of AND ADVOCATING ON BEHALF OF the landlord
4 in the negotiations between the tenant and the landlord. A designated
5 sales {associate} AGENT cannot provide the full range of fiduciary
6 duties to the landlord or tenant. The designated sales {associate} AGENT
7 must explain that like the dual agent under whose supervision they func-
8 tion, they cannot provide undivided loyalty. A landlord or tenant should
9 carefully consider the possible consequences of a dual agency relation-
10 ship with designated sales {associates} AGENTS before agreeing to such
11 representation.
12 This form was provided to me by {the company named below:
13 Licensee or Associate of Licensee: ___________________ (signature) of
14 Company: ____________________________________________________________
15 The above-named company, which is licensed as a real estate broker, is
16 (check one)
17 {} the landlord`s agent {} a dual agent
18 {} the tenant`s agent {} a dual agent with designated
19 sales associates
20 {} the broker`s agent}
21 (PRINT NAME OF LICENSEE) OF __________________ (PRINT NAME OF
22 COMPANY, FIRM OR BROKERAGE), A LICENSED REAL ESTATE BROKER ACTING IN THE
23 INTEREST OF THE:
24 (____) LANDLORD AS A (CHECK RELATIONSHIP BELOW) _______ (____) TENANT A
25 A (CHECK RELATIONSHIP BELOW)
26 _____ (___) LANDLORD`S AGENT ________________ (___) TENANT`S AGENT
27 _____ (___) BROKER`S AGENT __________________ (___) BROKER`S AGENT
28 ___________________ (___) DUAL AGENT ____________________________
29 ___________ (___) DUAL AGENT WITH DESIGNATED SALES AGENTS _____________
30 If dual agent with designated sales {associates} AGENTS
31 is checked:
32 _________________________ is appointed to represent the tenant; and
33 _________________________ is appointed to represent the landlord in
34 this transaction.
35 (I) (We) _____________________________________________ acknowledge
36 receipt of a copy of this disclosure form:
37 Signature of { } Landlord(s) and/or { } Tenant(s):
38 ______________________________________________________
39 _______________________________________________________
40 Date: _______________ Date: ________________
41 {c. The buyer-seller form and the landlord-tenant form shall each be a
42 one page, two-sided form, printed front and back.}
43 5. This section shall not apply to a real estate licensee who works
44 with a buyer {or a}, seller, TENANT OR LANDLORD in accordance with terms
45 agreed to by the licensee and buyer {or}, seller, TENANT OR LANDLORD and
S. 5089--A 9
1 in a capacity other than as an agent, as such term is defined in para-
2 graph a of subdivision one of this section.
3 6. Nothing in this section shall be construed to limit or alter the
4 application of the common law of agency with respect to residential real
5 estate transactions.
6 S 2. This act shall take effect January 1, 2008.
Increased Educational Requirements and Miscellaneous Changes:
Chapter 183 amended Section 440 of the Real Property Law. The bill has many purposes:
The bill creates a statutory definition of office manager. This will be a licensed associate real estate broker who elects to work as an office manager under the name and supervision of another individual broker or one who is licensed under a partnership, trade name, limited liability company or corporation. It provides that a branch office may be under the supervision of a duly appointed office manager or (as before) the direct supervision of the broker.
The bill increases educational requirements by requiring an applicant for a real estate broker’s license to furnish proof of attending at least 120 hours, formerly 90 hours, of approved real estate courses and that the applicant has actively participated in the general real state brokers business as a licensed real estate salesman under the supervision of a licensed real estate broker for a period of not less than two years, formerly one year, or has had equivalent experience in general real estate business for a period of at least three years, formerly two years.
The bill also gives the Department of State greater latitude to approve new technologies for the delivery of real estate qualifying education courses, principally through computer based distance learning, and provides that such courses may be approved by the Department as satisfying part of the educational requirements. At the same time it increase the sales qualifying course from 45 hours to 75 hours.
The bill will eliminate the current exemption from continuing education requirements for those brokers licensed after the effective date (July of 2008) who do not have fifteen years of consecutive licensure by that time.
Real estate license identification cards shall now need to contain a photograph of the licensee, and the minimum age for a broker has been raised to twenty years.
Text of the Revised Statute:
(Bill A08053)
AN ACT to amend the real property law, in relation to real estate brokers and real estate salesmen The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 440 of the real property law is amended by adding a new subdivision 6 to read as follows:
6. "Office manager" means a licensed associate real estate broker who shall by choice elect to work as an office manager under the name and supervision of another individual broker or another broker who is licensed under a partnership, trade name, limited liability company or corporation. Such individual shall retain his or her license as a real estate broker as provided for in this article; provided, however, that the practice of real estate sales and brokerage by such individual as an associate broker shall be governed exclusively by the provisions of this article as they pertain to real estate salesmen. Nothing contained in this subdivision shall preclude an individual who is licensed as an associate broker who elects to work as an office manager from also retaining a separate real estate broker's license under an individual, partnership, trade name, limited liability company or corporation.
§ 2. The first undesignated paragraph of section 440-a of the real property law, as amended by chapter 324 of the laws of 1998, is amended to read as follows: No person, co-partnership, limited liability company or corporation shall engage in or follow the business or occupation of, or hold himself or itself out or act temporarily or otherwise as a real estate broker or
real estate salesman in this state without first procuring a license therefor as provided in this article. No person shall be entitled to a license as a real estate broker under this article, either as an individual or as a member of a co-partnership, or as a member or manager of a limited liability company or as an officer of a corporation, unless he or she is [nineteen] twenty years of age or over, a citizen of the United States or an alien lawfully admitted for permanent residence in the United States. No person shall be entitled to a license as a real estate salesman under this article unless he or she is over the age of eighteen years. No person shall be entitled to a license as a real estate broker or real estate salesman under this article who has been convicted in this state or elsewhere of a felony, and who has not subsequent to such conviction received executive pardon therefor or a certificate of good conduct from the parole board, to remove the disability under this section because of such conviction. No person shall be entitled to a license as a real estate broker or real estate salesman under this article who does not meet the requirements of section 3-503 of the general obligations law.
§ 3. Paragraphs (b) and (c) of subdivision 1 of section 441 of the real property law, paragraph (b) as amended by chapter 324 of the laws of 1998 and paragraph (c) as amended by chapter 81 of the laws of 1995, are amended to read as follows: (b) Such further information as the department may reasonably require shall be furnished by the applicant including sufficient proof of having taken and passed a written examination and answered such questions as may be prepared by the department to enable it to determine the trustworthiness of the applicant if an individual, or of each member of a co-partnership or each member of a limited liability company or each officer of a corporation for whom a license as a broker is asked, and his or their competency to transact the business of real estate broker in such a manner as to safeguard the interests of the public. In determining competency, the department shall require proof that the person being tested to qualify to apply for a broker's license has a fair knowledge of the English language, a fair understanding of the general purposes and general legal effect of deeds, mortgages, land contracts of sale, and leases, a general and fair understanding of the obligations between principal and agent, as well as of the provisions of this section. The applicant must also furnish proof that he has attended for at least [ninety] one hundred twenty hours and has successfully completed a real estate course or courses approved by the secretary of state as to method and content and supervision which approval may be withdrawn if in the opinion of the secretary of state said course or courses are not being conducted properly as to method, content and supervision, and that either the applicant has actively participated in the general real estate brokerage business as a licensed real estate salesman under the supervision of a licensed real estate broker for a period of not less than [one year] two years or has had the equivalent experience in general real estate business for a period of at least 49 [two] three years, the nature of which experience shall be established by affidavit duly sworn to under oath and/or other and further proof required by the department of state. Computer-based and distance-learning courses may be approved by the department so long as providers demonstrate the ability to monitor and verify participation by the applicant for the specified time period. Notwithstanding the foregoing authority to approve computer-based and distance-learning courses, the department may prescribe that specified subjects or hours must be presented in a classroom setting.
(c) In the event the applicant shall be a licensed salesman under this article and shall have submitted acceptable proof pursuant to the provisions of either paragraph (d) of subdivision one-A of this section or paragraph (a) of subdivision three of this section of having attended and successfully completed [forty-five] seventy-five hours of an approved real estate course or courses within [four] eight years of the date of the application, the department may accept and credit same against the [ninety] one hundred twenty hours required hereunder.
§ 4. Paragraph (d) of subdivision 1-A of section 441 of the real property law, as amended by chapter 81 of the laws of 1995, is amended to read as follows:
(d) Anything to the contrary herein notwithstanding, on and after the effective date of this paragraph, no salesman's license or conditional license shall be issued by the department unless the application therefor has been accompanied by proof that prior to such application the applicant has attended at least [forty-five] seventy-five hours and successfully completed a real estate course or courses approved by the secretary of state as to method and content and supervision, which approval may be withdrawn if in the opinion of the secretary of state said course or courses are not properly conducted as to method, content and supervision. Computer-based and distance-learning courses may be approved by the department so long as providers demonstrate the ability to monitor and verify participation by the applicant for the specified time period. Notwithstanding the foregoing authority to approve computer-based and distance-learning courses, the department may prescribe that specified subjects or hours must be presented in a classroom setting.
§ 5. Paragraph (a) of subdivision 3 of section 441 of the real property law, as amended by chapter 319 of the laws of 1993, is amended to read as follows: (a) No renewal license shall be issued any licensee under this article for any license period commencing November first, nineteen hundred ninety-five unless such licensee shall have within the two year period immediately preceding such renewal attended at least twenty-two and one-half hours and successfully completed a continuing education real estate course or courses approved by the secretary of state as to method, content and supervision, which approval may be withdrawn if in the opinion of the secretary of state such course or courses are not being conducted properly as to method, content and supervision. The licensee shall provide an affidavit, in a form acceptable to the department of state, establishing the nature of the continuing education acquired and shall provide such further proof as required by the department of state. The provisions of this paragraph shall not apply to any licensed real estate broker who is engaged full time in the real estate business and who has been licensed under this article prior to July first, two thousand eight for at least fifteen consecutive years immediately preceding such renewal.
§ 6. Subdivisions 3 and 6 of section 441-a of the real property law, subdivision 3 as amended by chapter 961 of the laws of 1981 and subdivsion as amended by chapter 61 of the laws of 1989, are amended to read as follows:
3. Place of business; business sign required. Except as otherwise provided in this article, each licensed real estate broker shall have and maintain a definite place of business within this state, and shall conspicuously post on the outside of the building in which said office is conducted a sign of a sufficient size to be readable from the side walk indicating the name and the business of the applicant as a licensed real estate broker, unless said office shall be located in an office, apartment or hotel building, in which event the name and the words "licensed real estate broker" shall be posted in the space provided for posting of names of occupants of the building, other than the mail box. Where the applicant for a real estate broker's license maintains more than one place of business, the broker shall apply for and the department shall issue a supplemental license for each branch office so maintained upon payment to the department of state for each supplemental license so issued the same fee prescribed in this article for a license to act as a real estate broker. Each such branch office shall be under the direct supervision of the broker to whom the license is issued, or a representative broker of a corporation or partnership or manager of a limited liability company holding such license, or a duly appointed office manager. Such fee shall accompany such application and shall be non-refundable. For purposes of this subdivision, the principal residence of a real estate broker or salesman shall not be deemed a place of business solely because such broker or salesman shall have included the residence telephone number in his business cards.
6. Pocket card. The department shall prepare, issue and deliver, with the assistance of the department of motor vehicles, to each licensee a pocket card in such form and manner as the department shall prescribe, but which shall contain the photo, name and business address of the licensee, and, in the case of a real estate salesman, the name and business address of the broker with whom he or she is associated and shall certify that the person whose name appears thereon is a licensed real estate broker or salesman, as may be. Such cards must be shown on demand. In the case of loss, destruction or damage, the secretary of state may, upon submission of satisfactory proof, issue a duplicate pocket card upon payment of a fee of ten dollars.
§ 7. This act shall take effect July 1, 2008.