Rent Coach

Rent Coach: Is my broker entitled to a fee even though he didn't show me the apartment I'm taking?

By Mike Akerly  | March 7, 2013 - 12:45PM

Q. I just moved to NYC from out of state and have been looking for an apartment. I contacted the management office of a building about renting a "no fee" apartment. At that time, the management company sent me a list of options that were out of my price range.

I searched the web some more and contacted a broker who informed me via e-mail that he charges a one month fee for short-term rentals and I replied that I would agree to that. He showed me an apartment out of my price range. A couple of days later the management company of the building emailed me about an apartment that had just opened up in my price range. I went and looked at it, loved it, and decided to rent it.

Being the type of person that I am, I emailed the broker to let him know that I have found an apartment and mentioned that it was in the same building he had shown me and thanked him for attempting to find me a place. I get an email from him stating that legally I must pay him his broker’s fee since I am renting in a building in which he had shown me an apartment. I signed nothing nor filled out any kind of forms or paperwork with him. Is this true and does he have legal rights to the broker's fee?

A. No, in this case, the broker is not entitled to a fee. Typically, an agent requests that their prospective clients sign a fee agreement before going out to see any rentals.The agreement has a schedule where apartment addresses can be listed. It is very common for such agreements to have a provision stating that the client would owe the brokerage firm a fee in the event that they rent any apartment in a building they were shown by the broker.

However, absent an explicit contract providing for this type of agreement, the broker cannot collect a fee from you for an apartment he did not show you. You likely would have owed the agent a one month fee if you circumvented him and leased the apartment he showed you by contacting the managing agent directly even though you did not have a signed contract. That is because the only question of fact at hand would have been the amount of the broker’s fee, which you acknowledged via e-mail.

Without a contract, it would be difficult for a small claims court to determine exactly what agreement the parties had intended to enter into. A judge would not imply highly specific provisions such as the one at hand to an extremely vague agreement that only discussed the cost of services. If the agent continues to insist upon collection of the fee, you may wish to involve their managing broker to resolve the dispute.

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.     

Note: The information provided here is for informational purposes only. It should not be construed as legal advice and cannot substitute for the advice of a licensed professional applying their specialized knowledge to the particular circumstances of your case.

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