Rent Coach: My apartment is illegal. Can I get my broker's fee back?
By Mike Akerly |February 16, 2012 - 3:32PM
Q. After moving into an apartment in Harlem this month, I discovered after speaking to the neighbors that it’s not actually a legal residential space.
Though I initially liked the apartment, I became concerned that it may not be legal in other ways as well (e.g. being up to code). When I confronted the landlord, he offered to let me break the lease, which I agreed to do.
Can I get my broker fee back too since the apartment wasn't legal?
A. The short answer is probably “no.”
To be certain, you should review your fee agreement with the broker. Most likely it does not make your agent responsible for performing any due diligence on the building to determine if your apartment was completely legal. If that’s the case, your agent had no duty to discover that the apartment is not in fact suitable for residential use.
However, if your agent had specific knowledge that should have led him to believe that the apartment is not legal, he or she would have had an obligation to disclose that information to you.
Unfortunately, unless you know of specific facts that suggest this might be the case, it will be nearly impossible to prove. Most likely, your agent was no more aware than you were that the owner was marketing an illegal apartment.
The landlord, however, may be legally liable to you for the cost of the broker’s fee. You would need to argue that in small claims court if the landlord will not agree to repay you for it.
I would suggest that you approach the broker again and try to work something out. Instead of blaming them for the deception of the landlord, ask if they would be willing to assist you in finding another apartment without paying any additional fee. If they value their reputation, they may be willing to do so.
Mike Akerly is a New York City real estate attorney, landlord, and real estate broker. He is also the publisher of the Greenwich Village blog VillageConfidential.
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