TopNovember 2008 Newsflash

Prestige Title

Brokers Affidavit of Entitlement to Commission for Completed Brokerage Services
A recent amendment to New York Real Property Law regarding commission disputes impacts real estate brokers and realtors.  Real Property Law Section ("RPL") 294-b "Recording brokers affidavit of entitlement to commission for completed brokerage services" has been amended by Chapter 436 of The Laws of 2008.  This amendment is to take effect on January 1, 2009.
Presently, RPL Section 294-b provides that "a duly licensed real estate broker . . . may file an affidavit of entitlement to commission for completed brokerage services in the office of the recording officer of any county in which any of the real property is situated."  This affidavit of entitlement is filed in connection with the real estate broker asserting rights to a commission for producing a person who is ready, able and willing to purchase or lease any part of a parcel of real property pursuant to a written or oral contract of brokerage employment.  This contract is made between the owner of the parcel of real property and the broker.
It is important to note that under RPL Section 294-b, the filing of this affidavit must adhere to the following:
  • shall not invalidate any transfer of real property or lease;
  • shall not be deemed to create a lien; and
  • shall be discharged 1 year from filing.

The amendment, which is to take effect on January 1, 2009, sets forth a procedure whereby the amount claimed or alleged to be due a real estate broker may be deposited with the recording officer until the claim is resolved.  The amendment provides the following:

  • it expands the reach of the notice of entitlement to include a claim for commissions for transfers involving cooperative units;
  • it provides that the affidavit of entitlement will be recorded in the "lien docket" even though under the statute, it is still not considered a lien;
  • it provides that if the property involved is a 1-4 family dwelling, an individual condominium unit or an individual cooperative apartment that is to be used or intended to be used partially or wholly as a residence and the broker's commission is not paid at closing, the seller shall deposit the "lesser of the net proceeds of the sale or the amount of the unpaid portion of the compensation agreed to in such written contract, brokerage agreement . . .with the recording officer in whose office the affidavit was recorded until the rights of the seller and broker to such monies has been determined by order of a court of competent jurisdiction provided that the brokerage contract includes a notice, as required by Chapter 436, the affidavit has been recorded and the broker serves a copy of the affidavit on the seller prior to closing as required by the statute."

The amendment also provides that the failure to deposit monies with the recording officer does not "create a lien or encumbrance against any real property" and does not invalidate "any transfer of real property."

If you have any questions or would like further information regarding this newsflash, please contact Michael Alfieri, Esq. at (212) 651-1200 or
Prestige Title Agency, Inc. provides Commercial and Residential Title Services Nationwide.  For more information, please contact Anthony Chiellino at (212) 651-1200 or
15 W. 39th St., 10th Fl. New York, NY 10018 (212) 651-1200 Fax (212) 651-1201
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