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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: April 6, 2016

Agent Associated With Broker Can Look Only to Broker, Not Client, For Unpaid Commission

On March 24, 2016, Justice Singh of the New York County Commercial division issued a decision in Douglas Elliman, LLC v. Five E. 44th LLC, 2016 NY Slip Op. 30507(U), holding that a real estate agent associated with a broker can look only to the broker for an unpaid commission, explaining:

In their cross-motion for summary judgment, plaintiff asserts that it is undisputed that Bracha was an associate real estate broker associated with Douglas Elliman when the commissions were earned and therefore has no legal capacity to claim a commission from defendant, Five East. . . . .

Real Property Law § 440(2) provides that the practice of real estate sales and brokerage by such individual as an associate broker shall be governed exclusively by the provisions of this article as they pertain to real estate salesman. Furthermore, Real Property Law § 442-a provides that no real estate salesperson shall receive or demand compensation of any kind from any person, other than a duly licensed real estate broker with whom he associated, for any service rendered or work done by such salesperson in the appraising, buying, selling, exchanging, leasing, renting or negotiating of a loan upon any real estate.

Accordingly, because Bracha was an associate real estate broker associated with Douglas Elliman when the relevant commissions were earned, Bracha cannot independently seek a commissions from Five East. Bracha can only receive and/or demand compensation from the real estate broker with whom Bracha was associated, namely Douglas Elliman.

(Internal quotations and citations omitted) (emphasis added).

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