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August 2, 2008
Broker/Owner Conflict of Interest?
We've been renting in Carroll Gardens for a year now and are due to resign our lease in a few weeks. In the year that we've been in our apartment it's come to our attention that the broker who showed us the apartment and charged a fee when we signed the lease has a partnership with the owner and might be part-owner of the building. It seems to me that this is a conflict of interest and that they're running a scam and double-dipping if you will. Can anyone let me know if there's any law being broken here or how we can find out what this broker's affiliation with the owner and building are? One another note, the same broker is drafting the resigning of the lease and wants to ask us to pay another broker's fee for the renewal. Is that legit?
Comments
wow- maybe I'm out of touch but since when does a broker get another fee for a re signing of the lease? Your lease is a contract between you and the landlord. What needs redrafting? I'd check a little further into it because it does sound fishy.
as far as the initial signing, they acted as a broker for you so although they should have been more honest, they ar most likely still entitled to that original fee.
Posted by: bxgrl at August 2, 2008 1:57 PM
second brokers fee is a ripoff. first time is legit, cause they show you the apartment. second time you already have the apartment and don't need them to show you the same unit you live in again LOl.
Posted by: armchairwarrior at August 2, 2008 2:20 PM
That is the craziest thing I've ever heard, to charge a new broker fee for a lease renewal. I don't have professional advice to give, but if I were in your shoes I would do the following: which real estate firm does this broker work for? If it is his/her own firm and very small, then you don't have anyone to complain to. On the other hand, if it is a larger firm or owned by someone else you should report this broker. I'm not sure if this is a legal thing for the broker to be doing unless you have a contract with them that said otherwise (like if you signed something before they found the apartment for you that dictated a renewed annual fee? But that would be weird.)
It might be a gray area if they were part owners of the property, though. So second, I would check the public record for who is listed as the owner of the property. Both names should show up on the record if it is co-owned. If it is partly owned by this broker, then they are definitely an a--hole but I'm not sure if what they are doing is illegal - as a landlord, perhaps they could enforce some sort of crazy "fee". Even if the broker is not a co-owner, s/he could in cahoots with the owner. If this is something the owner is allowing to happen, I'd get the hell out of there. If you are going to be faced with a fee anyways then you might as well move into a better place.
Last, I might consider getting an opinion from a real estate lawyer.
Posted by: clintonhillbilly at August 2, 2008 11:25 PM
Certain provisions in contracts are illegal.
If it is biased or discriminatory for an example.
Use your imagination I am sure you will think of other ones..
A contract reprsents a meeting of the minds.
If it is one sided or discriminatory that is not a meeting of the minds.
This is just an example.
A renewal fee might be an illegal provision.
It might also be ilegal (even if the landlord has a real estate license or owns the company) to have initially charged a fee.
You have to investigate this thru some reputable source and then double check with a non-partial.
Posted by: madamlee at August 3, 2008 2:44 PM
clintonhillbilly is right. Most of all, check your lease to see if they wrote in weird or crazy fees. Most leases are pretty standardized but you must have had a contract with the broker when you retained them to find you an apartment, and you need to check that. If they were intending to charge you a fee for renewing, they would have had to make that clear (in which case they should have been told forget it.) A broker's fee is not part of the lease (nor should it be) -they're obviously trying to squeeze you.
The original broker fee isn't illegal, I'm sure. The broker did find you the apartment.
Posted by: bxgrl at August 3, 2008 4:34 PM
"might be part-owner of the building. It seems to me that this is a conflict of interest and that they're running a scam and double-dipping if you will. "
You can't say "might be". Ether it is or it's not.
Did the Broker disclose it? How much time passed before you discovered this relationship? Did you consult with a Lawyer? There are many question and methinks this is the wrong forum for that.
The What
Someday this war is gonna end...
Posted by: what at August 3, 2008 4:49 PM
You can check with the Real Estate Licensing agency and confirm if the Broker is operating in an ethical manner. I'm an agent and there are many rules. You as the renter should be able to find out, but the Broker does so many different functions. A new lease would involve a fee for the service so a lease renewal could fall under a new lease. The lease effective dates are different even if the terms are exactly the same. The fee would be the same for the service. The conflict of interest comment is not realistic since many people ask agents to represent their properties. Once you have a good agent you don't want to work with anyone else. People get comfortable with their agent. There is alot of personal information that is shared regarding income, etc. The broker might be willing to reduce their fee if the renewal is basic, but a fee could be charged for the lease creation, another credit check if necessary & processing service. Sorry, but it is still work for the broker....new lease or renewal!
Posted by: jw loves b_stones at August 5, 2008 1:27 PM
You can check with the Real Estate Licensing agency and confirm if the Broker is operating in an ethical manner. I'm an agent and there are many rules. You as the renter should be able to find out, but the Broker does so many different functions. A new lease would involve a fee for the service so a lease renewal could fall under a new lease. The lease effective dates are different even if the terms are exactly the same. The fee would be the same for the service. The conflict of interest comment is not realistic since many people ask agents to represent their properties. Once you have a good agent you don't want to work with anyone else. People get comfortable with their agent. There is alot of personal information that is shared regarding income, etc. The broker might be willing to reduce their fee if the renewal is basic, but a fee could be charged for the lease creation, another credit check if necessary & processing service. Sorry, but it is still work for the broker....new lease or renewal!
Posted by: jw loves b_stones at August 5, 2008 1:29 PM
Orginal fee is legit.
Renewal is not. Payment history over the past year should surfice and a new credit check isn't necessary.
That said if it's not a rent regulated apartment they could chose to not renew the lease.
I'm sorry "jw loves b stones" but your information is wrong. The broker is hired to find you the property not to renotiate leases after they have run their course.
Posted by: Adam Dahill at August 5, 2008 6:43 PM
It's totally legit.
Posted by: Bklyn1 at August 6, 2008 8:53 AM
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