Saturday, July 21, 2012

More Information on the Legality of Commission Rebates in NYC

This section from the DOJ is specifically about New York. There is a letter from the DOS to the DOJ clarifying the statute regarding commission sharing in New York.

"Real Property Law section 442 prohibits real estate brokers from sharing commissions obtained as a result of a real estate transaction with individuals or corporations who are unlicensed. The purpose of this prohibition is to prevent licensees from compensating unlicensed individuals for services rendered that would otherwise require a real estate license. Insofar as the statutory intent of Real Property Law section 442 is to discourage unlicensed activity, offering cash or promotional gifts, such as a cash rebate, in order to attract a new customer or client does not run afoul of the statute."

This is important as it clearly defines the difference between a "kick back" and a rebate to a purchaser. We utilize our firm's structure and legal right to rebate a portion of our commission to the buyer to facilitate deals. This benefits the seller, buyer and BOTH brokers as deals get closed smoothly and efficiently, leaving the buyer feeling fully satisfied emotionally and financially!

Read the full story here from The US Department of Justice

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