Be Alert! Questions on Some Current Issues

Feb 02, 2017

Q. I am a Broker with my own office. What do I do with the paperwork on listings or offers that never resulted in a sale or rental?

A. You keep them for 3 years according to DOS Regulations. The papers generated or received in your office as a result of real estate activity, including listings taken on properties that did not sell or rent and offers that did not result in successful transactions, must be kept by the broker for the required time. Failure to keep these records can result in disciplinary action by the DOS.

Q. Must I keep the original documents or can I save them on the computer or in the cloud?

A. The DOS has recently stated you may keep copies stored on the computer or in the cloud so long as the repository for those documents cannot be tampered with and the documents cannot be altered once the information has been stored there.

Q. I understand the LIBOR Legal Helpline can now be called as well as e-mailed. Is that true and when does it start?

A. It is true and has been in effect since January, 2017. You may call 631-236-4105 or 516-428-2103. You will either speak to me or Tim Quinn. If you do not reach either of us, leave a message and we will call or e-mail you back. You will need to leave your name, LIBOR number, phone number and e-mail address.

Q. I heard the DOS is allowing continuing education classes of one hour in duration. Is that true?

A. Yes.

Q. Can I be paid by more than one person on a transaction?

A. You can, as long as this information is disclosed to your client.

Q. I am an attorney and represented a buyer in a transaction in which the seller refused to pay the broker. Now my buyer has been named as a Defendant in a lawsuit brought by the brokers. I do not believe the buyer has any liability but wonder if there was something I could have done at the time of the closing to have prevented my client's president dilemma?

A. You could have refused to close and you could have explained to your client that you were trying to protect him since the brokers might bring him into a lawsuit (as they have)! You could have told the seller's attorney that you were not about to put your client in harm's way and would only proceed if the seller gave your client a hold harmless and agreed to pay any of the buyer's legal or other fees and expenses that might result from the seller's refusal to pay the brokers. You could have further insisted that the commission be held in escrow and that a reasonable amount of money be held against the legal fees and costs that might result from any action taken by the brokers to recover their commission. At that point, the seller's attorney could have explained your position to the seller and the seller may have decided to pay the brokers for the services he had received.

Q. I am an attorney and want to act as a broker for the purchase of my own house. The listing broker refuses to pay me, even though the house is on MLS. Can he do that?

A. Sure he can! In order for you to be paid a broker's commission on your own purchase, you would have to act as a buyer's broker and you would have to be an MLS participant, since compensation is only being offered to MLS brokers, and maybe only MLS brokers who are working for the seller. Just because an attorney has the right to collect a commission in a real estate transaction, he is not entitled to demand money not offered to him from an MLS listing broker who has agreed to share a commission with another MLS broker.