News Agency Disclosure Laws in Effect for NYC

New York City prides itself on being protectionist when it comes to tenant rights.  The newest law in this vein requires a clearer understanding between individuals and brokers on the nature of the broker’s position in any real estate transaction.

Agency disclosure refers to the act of letting everyone involved in a real estate deal know exactly who is aligned with whom.  This aids prospective buyers/tenants so that they know where the interest of the real estate agent lies.  If an agent is representing a property their fiduciary obligations are to the owner.  That means that when a tenant/buyer emerges, it is their job to get the best price possible while making sure the interested party is viable for the transaction.  If the agent is representing the buyer/renter, then the obligation switches side. 

However, this gets muddied when an agent brings a prospect to a property also being represented by the same brokerage (eg Corcoran).  This situation is known as dual agency, which can go one of two ways.  Traditionally, this would mean that both agents hold a fiduciary duty to the owner of the property.    This is VERY important for the renter/buyer to know.  However, the buyer/renter is allowed to (and we encourage) to ask for Dual Agency with designated agents.  That means that while Corcoran still represents both parties, the prospect’s agent can now work on their behalf, not the owners.  In turn, it is imperative that the owner understand that distinction as well, as they might have assumed that both agents of the same brokerage we’re working exclusively for them.  As you can tell, it can become a messy situation which is why we know have standardized paperwork to explain these types of differences, and allow the owners and prospects to choose what they are comfortable with. 

Despite an increase in paperwork, this is not an impediment for business and increases transparency between buyers/renters and real estate agents, something we have already embraced.  For more information on the new disclosure laws, click here to read the New York Times article that covers it.