The Wild Wild East
It is well known that practicing real estate in New York City is a world of its own, not governed by an official MLS and running by its own rules. The young and rapidly growing real estate brokerage CondoDomain.com in preparation for opening an office in NYC brought current President Hoyt Morgan from California to the Big Apple and after an extended period in temporary housing, he decided to move to a more permanent location downtown.
Morgan isn’t an agent or licensed, so he used a CondoDomain Realtor as his agent who Morgan acknowledges did a tremendous amount of hard work getting the deal closed which advertised a one month OP and after moving in, the management company denied payment. Morgan notes that this is yet another reason the city needs an MLS.
Morgan said, “Rose’s onsite manager denied paying, so I followed up with a manager at a main office. He acknowledged that my agent “went above and beyond” for me and did facilitate the transaction as required to receive a commission. I was, however, very politely and professionally informed by this manager that no NYC brokerage pays when there is any affiliation between the brokerage and the client, a stated “fact” I had not come across before and one that seems, quite frankly, like a pretty poor way to do business.”
In many areas, Realtors cannot represent themselves on an apartment lease, so the standard practice is to use their broker as a buffer third party to the deal, but in this situation, the manager denying payment seems to imply the same nepotism rule should apply despite Morgan not being licensed, rather playing an executive role at a brokerage.
We’ve known Morgan for some time, even prior to their advertising on AG, and we know him to be a level headed, very fair person, so we took note of his detailed post outlining the story of his still unpaid agent. When he pressed the issue, he was “gruffly informed [by Rose] that they reserve the right NOT to pay for any reason, even though an OP is published as in this case, and they were not going to pay. They also suggested that if I want to be a part of NYC real estate I should leave this alone. (hmm, should I take this as a threat?)”
Threats and no accountability
The bottom line for Morgan is summed up in one of his final statements. “This is crazy, right? When Rose publishes their commission rates for cooperating brokers, should we ever believe them? Is there anyone that can hold them accountable to their published rates?”
The Real Estate Board of New York (REBNY) didn’t look kindly on the situation but claimed they couldn’t really take action. This is why CondoDomain is calling for a legitimate MLS as one possible solution to the unethical practice of blatantly refusing to pay agents simply because a property management company “reserve[s] the right NOT to pay for any reason.”
What can be done? Weigh in.
What do you think? Is New York just the Wild Wild East and it is to be expected, or could real steps be made toward implementing an actual MLS? What makes NYC so different from the rest of the world that it cannot progress to the modernity of the rest of the real estate world that functions with Codes of Ethics, MLSs and grievance committees that have the power to do more than face the other direction? Is there hope for NYC?