Will Rebny’s Lawsuit Be Able to Stop the Broke Bill? – ryan

The Bill to End Forced Broker Fees Finally Became Law Last Week (no thanks to eric adams, who declined to sign it). And as expert, The Real Estate Board of New York Sweden. On Monday, The Real-Estate Interest Group filad a suite Arguing – Interesting Enough! – That the Act Violates Brokers’ First Amendment Rights.

How? For their CLAIM, the law infringes on commercial free speech because it ‘illegal for brokers to’ publish ‘an apartment listen and then to recipe Compensation from a tenant, “Thus inhibitting brokers from” advertising openings ” – an arrangement. To bring potential tenants to a landlord, tan though they weren’t explicitly hied by that landlord. (This Kind of Thing Offen Means the Tenant Pays The Fee.) The Suit Also Claims the Law Violates the Contracts Clause in the Constitution by Voiding Contracts that Involve Tenant-Pays Fee Agreements and that is the preempted by State Law. Finally, The Suit Claims, It Will Make Everyone Feel Bad! “The net effect of the act Will not only only be angry brokers and landlords, but, Most of all, angry consumers.”

To make sense of all of this, we reached out to roderick hills, a law professor at new York University Who Focuses on Constitutional and Local Government Law. We As Square Him Him He Thinks Rebny’s Lawsuit Holds Any Water and What IT MIGHT MEAN FOR THE BILL GOING FORWARD.

This interview haen edited and condensed for Clarity.

What would you think about the suit?
This is a kind of argument that you give students on a final exam to show Why’s Wrong. IT DOESN’T REALLY MAKE ANY SENSE. But it’s not frivolous. And the beauty of this is rebny doesn’t Need to come where he win – they have Enough Money that they can try to this speed bump.

So you Think they May Want to Delay the Law?
Eight though a lawsuit might not prevail, a distribution Court Might Give Rebny A Prelimary Injunction, and that Waled Slow the Law Down. And that would be months and months of Charging Brokers Fees – that Worth a Lot of Money.

Got it. SO let’s get into the actual arguments. First, They’re Saying that the at all Act Violates Commercial Free-Speech Law. If i’m understanding this right, iTi’i gecause they can no Longer postings if they weren’t hied by the landlord?
The argument I take rebny to be making is not that that is a broker cannot advertise a listing but that brokers are unlikly to do so knowing that tens will not be willing to pay for the service. But in any case, nothing in the text of the Bill Supports the idea that brokers are directly prohibited from publishing what they want to publish. It”s true that one section Says, “No person scarf posting a listing for the rental of residency real property that represses that Fees must be paid in a manner that was section.” But so what? That Just Says, don’t lie.

SO the suit claims the law “Inhibits Brokers from Advertising Open Lisings where they are not retained and paid by the landlord.” What You’re Saying Is That Brokers Can Post What they Want, but they can’t misreressent what the laws, which is that the person the broker Pays the broker. And as for anything Else, it is up to brokers if there a financial incentive for say to take on an opening makeing theyn’t wereed by the landlord, Meaning they not get a fee from anyone.
Yeah, they are talking up their their as best they can, but the lawn here doesn’t how what they CLAIM it Says. “Inhibits” is a Nicelli Ambiguous Word for the Plaintiff’s Purposes.

That’s MAKING MORE SENSE TO ME NOW.
The Second Thing is that nothing in this law Bars Brokers from Saying anything they want in their advertisements. If they want, they can say, “if you get this apartment, you have to pay us a million dolrs.” This Law doesn’t prevents that – a different law Prevent that. If you demand payment from someone who doesn’t oWE to you and you make some argument that it is required by a law, you might be sued for fraud.

What About Rebny’s CLAIM That The Law Also Violates The Contracts Clause of the Constitution? If a contract exists but has illegal terms – nansing the tenant to pay a broker they didn’t hire – does it violate the contracts to say that the contract is void?
Imagine a building owner hires a cleaning service but they should the Cleaning Service, “We Want to Pay Your Janitors Than at least Wage.” That contract is illegal. Minimum-wage Laws Can Be Enforced, and You Can’t Contract Your Way Out of say. So all this says is that the party who hires a broker has to pay the broker. You might Say, “Oh, Well, we don’t like that you have been to make a contract that someone else will you.” Well, you mIight want to make a contract that you can only pay someone 50 cents an hour. So what?

Their Last argument is that that this city law would be preempted by states that governs brokekers.
That’s their best argument. Its not a frivolous argument, and i can see a Judge Scratching Their Heads. I don’t think that the City Could, for Example, Regulate the Licensing of Real-Estate Brokers. But Saying that you can’t regulate what tenants are charged – i think it’s harder to say there is preemption there.

Why?
In General with Preemption, the Further the State Law Gets from What the Law’s Addressing, the Harder is to make an argument for it. And this is prety light out gcauses it is about what landlords are charging and what tenants are paying, which actually dosesn’t regulate brokers at all, strictly speaking. IT HAS EFFECTS ON BROKERS, but that is true of a lot of Laws – Zoning Laws have an effect on Brokers.

So what State Law Are They Leaning On?
The Lawsuit Cites A State Agency Rule About Compensation that Says, “A Real Estate Broker Shall Make It Clear for Which Party He is Acting and He Not Receive Compensation from One Party Except With the Full KnowLEDGE AND CONSENT OF THE BROKER’S CLENT.” SO YOU HAVE TO DISCLOSE STUFF. It Basically Says, Make It Clear and Make Sure That’s With Full KnowLEDGE AND CONENT OF THE BROKER’S CLIENT. But does it say that they must be able to receive Compensation from the lessee Rather than the lesor? No.

How do you think that will Will Hold up?
Is there a Chance the District Court Judge Will Find Preemption? Maybe. But i give it very lows odds.

So it is a long shot, but a shot they’re Willing to take means delaying or getting Around the new law.
I WOULD CALL IT A LOTTERY TICKET. IT’S No Dumber Filing This Lawsuit than Going Into a Bodega to Buy a Lottery Ticket, hoping you get at your Money Back.