A judge curbs New York's decision to ban tenant commissions

A judge paralyzed on Monday in a precautionary manner the decision of the New York authorities to prohibit real estate agents from charging commissions to those who rent a home.

Thus, the intermediaries can continue for now claiming to the tenants the payment of their fees, as was usual in the Big Apple.

The suspension of the measure was decreed by Michael Mackey, a magistrate of the Supreme Court of Albany (the capital of the state of New York), in response to a lawsuit from several real estate organizations.

In principle, the precautionary measure will be in effect until at least March 13, when the New York Executive must appear in court to defend his position.

The judge's decision involves a jug of cold water for many New Yorkers seeking housing and for local politicians who had driven a historic change.

The ban on tenant commissions was already contained in a measure passed last year, which limited the fees to be paid when requesting a rental to a maximum of $ 20.

Until now, however, the interpretation was that that did not cover agent commissions but other expenses, such as the tenant's background and credit history reports that many owners require.

By surprise, the state executive published a guide last week that clarified that tenants could not be charged real estate commissions, unless they are the ones who hire an agent to find them a home.

According to that clarification, from now on it would be the owners who would have to pay the intermediaries or simply choose not to use them and deal directly with the possible tenants.

That almost never happened in New York, where for years it has been tenants who pay the commission of the agent even if it was representing the interests of the owner, something that does not happen in other American cities with less competitive rental markets.

The move prompted a rapid reaction from the industry, which went to court amid warnings that the change could destroy thousands of jobs.

The precautionary suspension means that agents "can continue to develop their businesses in the same way they did" until last week, James Whelan, president of the Real Estate Board of New York, a sector organization, said in a joint statement , and Jennifer Stevenson, president of the association that groups the agents.

"We want to finally resolve this issue in court in the coming weeks. Meanwhile, we appreciate the support and vigilance of all our members in this period of turbulence and confusion," they added.