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A06355 Summary:

BILL NOA06355
 
SAME ASSAME AS S02157-A
 
SPONSORSolages
 
COSPNSREpstein, Griffin, Gottfried, Thiele, Dickens, Anderson, Sillitti, Zinerman, Simon
 
MLTSPNSR
 
Amd §440, RP L
 
Requires associate real estate brokers serving as real estate office managers to exercise supervision over other associate brokers and real estate salesmen.
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A06355 Actions:

BILL NOA06355
 
03/16/2021referred to judiciary
05/26/2021reported referred to rules
06/02/2021reported
06/02/2021rules report cal.346
06/02/2021ordered to third reading rules cal.346
06/03/2021substituted by s2157a
 S02157 AMEND=A THOMAS
 01/20/2021REFERRED TO JUDICIARY
 02/01/2021REPORTED AND COMMITTED TO RULES
 02/02/2021ORDERED TO THIRD READING CAL.232
 02/03/2021AMENDED ON THIRD READING 2157A
 02/08/2021PASSED SENATE
 02/08/2021DELIVERED TO ASSEMBLY
 02/08/2021referred to judiciary
 06/03/2021substituted for a6355
 06/03/2021ordered to third reading rules cal.346
 06/09/2021passed assembly
 06/09/2021returned to senate
 12/10/2021DELIVERED TO GOVERNOR
 12/21/2021SIGNED CHAP.699
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A06355 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A6355
 
SPONSOR: Solages
  TITLE OF BILL: An act to amend the real property law, in relation to associate real estate brokers acting as office managers   PURPOSE OR GENERAL IDEA OF BILL: To mandate that licensed associate brokers, operating as office manag- ers, have the same statutory obligations of oversight placed on brokers at their definite place of business.   SUMMARY OF SPECIFIC PROVISIONS: Section one of the bill amends the definition of office manager in subdivision 6 of section 440 of the real property law. An office manager must have been active in the real estate industry for two of the four years preceding their appointment as an office manager. An office manag- er is required to supervise salesmen and associate brokers. Section two is the effective date.   JUSTIFICATION: In New York, real estate brokers are required to maintain and supervise a principal place of business. Additionally, brokers with numerous offices can appoint a licensed associate real estate broker as an office manager to oversee their branch offices. An associate real estate broker has the same licensing credentials as a broker and can work as an inde- pendent agent, but has chosen to work under the name and supervision of another broker. However, unlike a broker, associate brokers acting as office managers are not held to the same statutory obligations of oversight placed on brokers at their principal place of business. Instead, office managers are held to the same standards as a real estate agent while maintaining their broker's license. This lack of oversight over agents by office managers can manifest itself with agents who are not properly trained and supervised in their behavior, performance, and compliance with fair housing regulations. This bill would require that associate brokers acting as office managers are held to the same standards as licensed real estate brokers, and ensures that proper oversight is given over real estate agents irrespec- tive of whether they are working out of a broker's principal pla ce of business or branch office under an office manager.   PRIOR LEGISLATIVE HISTORY: New legislation.   FISCAL IMPLICATIONS: TBD.   EFFECTIVE DATE: This act shall take effect immediately. The terms real estate agent and broker are often used interchangeably. While there may be overlaps in what they do, the two are distinctly different, especially when it comes to their qualifications. A real estate agent serves as a facilitator of real estate transactions and is responsible for bringing buyers and sellers together. A real estate broker, on the other hand, is someone who continues their education past the agent level to attain a higher- level license as a broker. For example, in New York, an agent is required to complete a 75-hour real estate education course in real estate approved by the Secretary of State and pass a qualifying examination administered by the Department of State. While a broker must have at least two years of experience as a licensed agent or at least three years of experience in the general real estate field, or a combination of the both, meet the minimum points required for the experience type, (e.g., buying and selling your proper- ty, managing property owned by your employer), have satisfactorily completed both the qualifying agent course of 75 hours, an additional 45-hour broker course as approved by the Secretary of State, and have passed a qualifying examination adminis- tered by the Department of State. Having a broker's license allows an individual to work as an independent agent or have a brokerage business with other agents working under them. When a broker employs other agents, those agents handle most or all of the brokerage transactions. However, it is the broker who is ultimately responsible for all transactions that come through their brokerage and for the supervision and conduct of its agents within their brokerage. Brokers employing agents take on a considerable risk if an agent is not properly trained and supervised, particularly concerning fair housing regulations. On November 17, 2019, Newsday revealed that over a three- year period it had used Fred Fieberg, cofounder of the Fair Housing Justice Center, and Robert Schwemm, Professor of Law at Kentucky College of Law and an expert on Fair Housing Laws, to conduct tests of real estate agents doing business from the New York City line to the Hamp- tons; from Long Island Sound to the South Shore. They used eighty-six paired matches, thirty-nine Black and White, thirty-one Hispanic and White, and sixteen Asian and White. Newsday confirmed that the agents had houses to sell by doing an online search of the Zillow Website. According to the Newsday report, forty-percent of the tests demonstrated disparate treatment in violation of Federal Fair Housing Laws. The breakdown was forty-nine percent of Blacks, thirty-nine percent of Hispanics, and nineteen percent of Asians experienced disparate treat- ment, each being equally qualified to purchase the properties as were the Whites with whom they were paired.' The price range of the homes were reported to be from $400,000 into the millions. In seven tests conducted by Newsday, agents were caught providing blatant unequal service to minority prospective homebuyers compared with their white counterparts. One agent demanded to see identification of the minority tester, but not the white tester. A minority tester was required to present proof of preapproval for a mortgage loan before receiving listings-unlike the white paired tester. An agent refused to show listings to a minority tester unless they agreed to sign an exclu- sive broker's agreement before the agent invited the white tester to view homes without requiring such agreement. In an effort to prevent these violations of fair housing laws, the Committees recommend the Legislature enact new statute requiring brokers standardize pre-home showing policies, including: Thus, it is up to the broker to supervise his or her agents by providing direct training or training resources concerning behavior, performance, and legal compli- ance. Currently, Article 12-A of the real property law does not have a section detailing a broker's supervisory responsibilities over an agent. This bill seeks to correct this issue by adding this new section to the law. Such a provision must be added to provide clear standards about the state's expectations for adequate and reasonable supervision over real estate agents by real estate brokers.
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A06355 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          6355
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                     March 16, 2021
                                       ___________
 
        Introduced  by M. of A. SOLAGES -- read once and referred to the Commit-
          tee on Judiciary
 
        AN ACT to amend the real property law, in  relation  to  associate  real
          estate brokers acting as office managers
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Subdivision 6 of section 440 of the real property  law,  as
     2  added by chapter 183 of the laws of 2006, is amended to read as follows:
     3    6.  "Office manager" means a licensed associate real estate broker who
     4  shall by choice elect to work as an office manager under  the  name  and
     5  supervision  of  another  individual  broker  or  another  broker who is
     6  licensed under a partnership, trade name, limited liability  company  or
     7  corporation.  An  associate real estate broker shall be required to have
     8  been active as a licensed associate broker for at least two of the  four
     9  years  preceding appointment as an office manager. Such individual shall
    10  retain his or her license as a real estate broker  as  provided  for  in
    11  this  article  and shall be required to exercise the same duty of super-
    12  vision over salesmen and associate brokers as  a  licensed  real  estate
    13  broker;  provided,  however,  that the practice of real estate sales and
    14  brokerage by such individual as an associate broker  shall  be  governed
    15  exclusively  by  the  provisions of this article as they pertain to real
    16  estate salesmen. Nothing contained in this subdivision shall preclude an
    17  individual who is licensed as an associate broker who elects to work  as
    18  an  office  manager  from also retaining a separate real estate broker's
    19  license under an individual, partnership, trade name, limited  liability
    20  company or corporation.
    21    § 2. This act shall take effect immediately.
 
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08443-03-1
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