31. Listing Agreements

Declaratory Ruling 92-35 Matter of Greiner Maltz -applies 19 NYCRR 175.15 and prohibits semi-automatic renewal clause, which renews listing unless seller notifies broker 30 days prior to expiration

Case #117 Matter of DOS v. Fuller, Consent Order -failure to include prescribed definition of "exclusive right to sell" and "exclusive agency" (19 NYCRR 175.24) and to specify services, $1,000 fine and 30-day suspension

Case #269 Matter of DOS v. O'Brien, Consent order -failure to include required definitions (19 NYCRR 175.24) and other violations - fine and suspension

Opinion Letter 92-24 (Edmund Schaffzin) - one sentence "listing agreement" probably unenforceable; failure to specify terms and conditions, services and duration

10 DOS 92 Matter of DOS v. Donati - listing agreements may specifically provide that they are assignable

Opinion Letter 92-42-A (Staro) - clarifies that there is no obligation to reopen negotiations regarding commission

Opinion Letter 92-42 (Jeffrey Randall Karp) commission rates are negotiable; listing broker can reopen negotiation with client to facilitate purpose of agency. Expresses DOS opinion under agent's fiduciary duty that this must be done if it is necessary to achieve purpose of agency (no authority provided for this assertion, which seems incorrect, certainly if a fair and reasonable commission was negotiated at the outset)

Opinion Letter 92-41 (Iva Liebert) - expresses DOS' professional opinion that "in-house waivers" are impermissible double agency. No mention is made of the 1991 DOS Treatise on the Law of Agency in Modern Real Estate Transactions, which recognizes this approach or RPL §443, which recognizes the propriety of dual agency with full disclosure and informed consent

Opinion Letter 92-32 (Phil Oddo) - commission agreement can include a "gift" promotion to client. Broker can amend a fee previously negotiated to offer such a promotion (have a trip to Atlantic City after closing). Sales associate must obtain broker approval

105 DOS 93 Matter of DOS v. Jacob - inadequate "EXPLANATION" violates 175.24(b); insufficient evidence of failure to give list of MLS members 175.24(c)(1); dismissal of charge of false advertising where broker substantially performed obligations and owner did not give reasonable opportunity to cure alleged defaults and suffered no damage; inadequate evidence of failure to supervise (175.21[a]); post-hearing submission not considered as no request for leave was made during the hearing

122 DOS 93 Matter of DOS v. Century 21 All the Best - upholds use of MLS form agreement - form not required to fully describe services or advice regarding agency issues and risk of subagency; broker not required to verify property ownership and can enter into valid agreement with one co-owner (where prior to achievement of agency purpose broker lacks knowledge of joint ownership); failure of proof of fraud, breach of fiduciary duties and illegal retention of deposit or unearned commission

150 DOS 93 Matter of DOS v. Kirkman - charge of listing rental without authorization (175.10) dismissed; where relied upon (mis)representation of claimed manager and broker acting on a similar representation, had previously obtained tenants without incident

38 DOS 94 Matter of DOS v. Scala - application to reopen hearing requires showing of meritorious defense; here affidavit filed established conduct of business under unlicensed trade names and does not show defense to use of unlicensed address; improper use of trade name prior to licensure; improper use of unlicensed address on listing agreements; uncharged misconduct of operating unlicensed corporation not considered; late affidavit considered "in the interests of justice"

9 DOS 94 Matter of DOS v. Shane - motion for pre-hearing discovery beyond SAPA 401(6) is denied; rules re:subpoenas in administrative proceedings reiterated; proper procedure of reserving right to file post-hearing memorandum of law; MLS form listing agreements are acceptable; individual license not sufficient to allow acting as representative of corporate licensee need affiliated license; agreements procured by individual acting under name of firm but without affiliated license are illegal and unenforceable - no brokerage fee can be claimed; misrepresentation and execution of unauthorized extension; misrepresentation of law (distinction between canceling agency authority and abiding contract rights); RPL §443 controls the disclosures required of licensees; subsequently licensed corporation not vicariously liable; failure to provide copy of agreement (19 NYCRR 175.12); inadvertence considered in determining penalty

CRC #387 Matter of DOS v. O'Hanlon, et al., Consent Order re: North Shore MLS - decision to list with MLS must be made by property owner; principal must be free to choose which broker will act as owner's agent or subagent; delete provisions for commission split to be negotiated between listing and selling brokers; enforcement of arbitration by CPLR Article 75, not expulsion; discipline enforcement by DOS, not MLS; overruling arbitrator decision re: retaliation against complainant

CRC #96-2008 Matter of DOS v. Tisi, Consent Order - failure to timely issue an unconditional release to principal from a listing agreement as required by an addendum to said listing agreement; $750 fine

35 DOS 98 Matter of DOS v. Harry Home Sales, Inc. - breach of fiduciary duty; vicarious liability; fraudulent practices; net listing agreement; modification of listing agreement originally providing for brokerage commission of 7% of sales price ($125,000) to a $25,000 payment to the broker to be allocated as commission and for repairs to the property with the seller to receive the $100,000 balance, is not a net listing agreement in violation of 19 NYCRR 175.19 since amount to be retained by broker is not for commission (brokerage fee not based upon difference between purchase price and specified net amount to be paid to the seller); such agreement not unconscionable due to inadequacy of consideration where broker was undertaking monetary risk and could lose financially; broker breaches fiduciary duties of reasonable care, skill, diligence and judgment where he incorrectly advises seller that, to qualify for an FHA mortgage, specific repairs would have to be made to the property when such repairs were not required and seller thereby assumed unnecessary financial obligation; broker breached fiduciary duty of full and fair disclosure when broker became aware that repairs were unnecessary and failed to advise seller thereof; broker’s breach of fiduciary duty resulted in benefit to the broker to the financial detriment of his principal; broker’s breach of fiduciary duties resulted from negligent acts equating to incompetence; broker is not entitled to fee taken in transaction and is liable for the full amount of damages caused by the breach; corporate broker is vicariously liable and law imputes to it actual knowledge of and responsibility for the cognitional acts of its representative broker; restitution in the amount of $22,000 plus interest; failure to present proof of satisfactory compliance will result in license suspension until proof of compliance is submitted

CRC #97-3028 Matter of DOS v. Abrams, Consent Order - licensee pleads nolo contendere to altering the commencement date of a listing agreement, causing her principal’s name to be signed to a second listing agreement, and submitting improperly executed and altered listing agreements to the MLS; $1,000.00 fine and completion of three hour course on execution of legal instruments and documents

189 DOS 99 Matter of DOS v. Naftal - listing agreements; deposits; unauthorized practice of law; vicarious liability; amendment of pleading to conform to the proof; improperly altering listing agreement without the consent or knowledge of principal to show the potential commission split with buyer’s broker to meet MLS requirements; preparing and submitting fraudulent MLS change notifications purporting to extend and alter listings; deposit of escrow funds into operating account; preparation of lease constitutes the unauthorized practice of law; pleadings may be amended to conform to the proof and encompass a charge not stated in the complaint where the issue has been fully litigated by the parties and is closely enough related to the stated charges that there is no surprise or prejudice to the respondent; continuing to offer properties for sale after preparation of forged listing extensions violates 19 NYCRR 175.10; DOS fails to establish violation of 19 NYCRR 175.12 for failure to provide copy of listing extension where extension was not authorized by principal; DOS fails to demonstrate demand for unearned commission where broker may have believed they were entitled to a commission; broker’s licenses suspended for one year and thereafter until such time as restitution in the amounts of $5,000.00 and $2,055.40 is made

101 DOS 00 DOS v. Re/Max All-Pro Realty - accounting to clients; disclosure of agency relationships; listing agreements; vicarious liability; broker fails to provide RPL §443 agency disclosure notice; one co-tenant in a tenancy in common can execute a valid agency employment contract with a broker where either (i) prior to the achievement of the agency purpose, the broker lacks actual knowledge of the joint ownership (liability to the broker is circumscribed only to the joint owner who hired the broker), or (ii) where the non-assenting co-owner subsequently ratifies or acquiesces in the action of the other co-owner; broker fails to follow his principal’s instructions with respect to the collection of rents and deposits; broker negligently prepares purchase and sale contract and occupancy agreement (unauthorized practice of law not alleged in complaint); broker fails to provide accounting to client upon client’s request; corporate broker is vicariously liable for the unlawful acts of its representative broker; corporate broker’s license and representative broker’s license are suspended for six months

599 DOS 00 Matter of DOS v. Ward - forgery; listing agreement; where evidence establishes that forgery of seller’s initials on part of the listing agreement occurred within the firm but fails to establish who committed such forgery, corporate broker is responsible for the acts committed by his salespersons within the actual or apparent scope of their authority and by the employee who affixed the forged initials to the listing agreement; such responsibility is shared by the corporate broker’s representative broker; use of a dollar amount, rather than a percentage of the selling price, causes the multiple page listing agreement to be vague, ambiguous and indefinite where only the first page was exhibited to the seller indicating a commission of 5% contrary to the second page which set forth a specific dollar amount which was 10% of the listing price; sales agent fined $500.00, corporate broker fined $750.00 and ordered to refund half of the commission

CRC #98-1598 Matter of DOS v. Shane, Consent Order - listing agreement; broker engages in unlawful business practices by making misrepresentations to his principals regarding the length of the listing periods; broker demonstrated untrustworthiness where he represented to principals that they could withdraw their listings at any time without advising them of their obligation to pay a commission in the event of such withdrawal; $4,000.00 fine; $800.00 restitution; broker’s license suspended for six months; brokers consent to revocation of their licenses and agree not to have any financial or ownership interest in any business in which they hold a real estate broker’s license in the event that broker’s are found or plead nolo contendere or admit, after a disciplinary proceeding, to have violated any part of the consent order or any part of Article 12-A, DOS regulations or Judiciary Law §478; broker unconditionally releases principal from listing agreement; broker agrees to have principals sign their names next to the expiration date in all future listings; broker shall not represent to principals that they can withdraw their listings or terminate broker unless broker equally represents principal’s obligation to pay commission in the event of said withdrawal or termination

CRC #99-2491 Matter of DOS v. Kamins, Consent Order - listing agreements; broker prepared and obtained co-exclusive listing agreement without making said agreement contingent upon another co-exclusive listing agreement for the same property between the owner and a competing broker while having knowledge of the other listing agreement; brokers fined $300.00 each; restitution in the amount of $10,500.00

287 DOS 01 DOS v. Mulwitz - failure to appear at hearing; jurisdiction; listing agreement; DOS has jurisdiction where broker is licensed at time of alleged unlawful conduct and where the disciplinary hearing was held during the two year period where broker was eligible to automatically apply to renew license; ex parte hearing may proceed upon proof of proper service; Reg. 175.10 prohibits the offering of property for lease without the authorization of the owner; DOS fails to prove failure to cooperate with DOS investigation as DOS was unable to contact broker and thereby broker did not fail to supply requested information; DOS may order restitution for unearned commissions but may not order damages; restitution in the amount of $825.00; further application request will not be considered until proof of payment of restitution

861 DOS 05 DOS v. Lambro – listing agreement; broker breached his trust with his seller client when he failed to point out to her that listing was to extend for a period of one year; broker breached his fiduciary duties to his seller client when he failed to comply with his client’s requests to terminate the agency and then when he falsely notified the MLS that the home was off the market and thereafter restored the cancelled listing to the MLS in contravention of his client’s and her attorney’s request; broker’s license revoked.

1008 DOS 06 Matter of Gold Star Homes – failure to provide agency disclosure, net listing, duty to supervise, allow unlicensed activity, unauthorized alteration of documents, refusal to release client from improper listing, failure to cooperate with DOS, egregious violation, revocation

136 DOS 07 Matter of Burkhardt- Failure to provide agency disclosure; property offered without consent of owner; failure to refund deposit; failure to cooperate with DOS investigation; restitution as condition to relicensure

2061 DOS 07 Matter of Lambro- default; appeal; new hearing on penalty; failure to explain 1 year duration of listing; incompetency; failure to deal honestly; re-listing without authorization; 175.10; 1 year suspension

1399 DOS 08 Matter of Janowski – corporate real estate broker; automatic renewal of listing 175.15; order to discontinue lawsuit for commission; $3,000 fine by deadline or suspension for 3 months after pay fine

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