Letter From New York Dept. Of State Re: Real Property Law Section 442 And Rebates
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STATE OF NEW YORK DEPARTMENT OF STATE DIVISION OF LICENSING SERVICES ALFRED E. SMITH STATE OFFICE BUILDING 80 SOUTH SWAN STREET PO Box 22001 ALBANY, NY 12201-2001 ELIOT SPITZER LORRAINE A. CORTÉS-VÁZQUEZ February 6, 2008 Gregg Malawer, Esq. Dear Mr. Malawer: Your correspondence to Secretary of State Cortes-Vazquez, dated December 5, 2007, has been referred to me for reply. You have inquired as to whether real estate brokers may offer and pay rebates to clients. Real Property Law section 442 prohibits real estate brokers from sharing commissions obtained as a result of a real estate transaction with individuals or corporations who are unlicensed. The purpose of this prohibition is to prevent licensees from compensating unlicensed individuals for services rendered that would otherwise require a real estate license. Insofar as the statutory intent of Real Property Law section 442 is to discourage unlicensed activity, offering cash or promotional gifts, such as a cash rebate, in order to attract a new customer or client does not run afoul of the statute. Thank you for your inquiry. TELEPHONE: (518) 474-4429 • FAX: (518) 473-6648 • WWW.DOS.STATE.NY.US • E-MAIL: INFO@DOS.STATE.NY.US |