Q: My husband and I are shopping for a rental in Brooklyn. We discovered that our actual property agent and the vendor’s agent work in the identical workplace and report back to the identical boss, and that the vendor has completed a number of offers with this workforce. Throughout our negotiations, there have been a couple of points, and the end result is all the time that our agent bends to the need of the vendor. What’s the obligation of an actual property agency if it employs the brokers on each side of a deal? What rights do we now have if we don’t really feel a dealer is objectively representing our pursuits?
A: Your actual property agent ought to be representing your pursuits with what state regulation calls “undivided loyalty.” If that’s not taking place, you want a brand new agent.
“Ethically, there ought to be a transparent separation of pursuits,” mentioned Steven O. Goldschmidt, director of gross sales at Coldwell Banker Warburg and co-chair of the Actual Property Board of New York’s Residential Brokerage Ethics Committee.
In New York, it’s authorized — although discouraged — for an agent to symbolize each a purchaser and a vendor, or for members of the identical workforce to symbolize each events. However you, because the consumer, have to be notified of this association and the constraints that it may create in your agent. State regulation requires that brokers fill out a kind during which they speak in confidence to their shoppers whether or not they’re appearing as a twin agent (representing each events), or as a twin agent with designated gross sales brokers, which could possibly be the situation you describe.
“In a standard relationship, your agent’s loyalty is solely to you,” mentioned Ruta Behrend, companion at Tane Waterman & Wurtzel P.C. “Underneath twin company, nevertheless, key fiduciary duties, similar to loyalty, confidentiality, and full disclosure, are essentially divided.”
If the brokerage didn’t inform you about its relationship to the vendor, it could be in violation of state regulation, and that might impression whether or not your settlement with the corporate is enforceable. It may additionally result in disciplinary motion by the New York State Division of State.
You’ll be able to contact the administration of the brokerage workplace and ask to be related with an agent who is just not a part of the workforce representing the vendor. Or you may search illustration elsewhere — although this is perhaps tough if you happen to’re deep within the sale course of. Earlier than you break off any relationship along with your agent, have your lawyer evaluate the settlement you and your agent signed, to make sure you aren’t breaching your contract.
For weekly e-mail updates on residential actual property information, join right here.
