Mandatory Disclosures and Notices
Every year seems to bring a new disclosure or notice requirement for real estate brokers. But just what is required these days, and how do brokers comply?
Below are just a few of the disclosures and notices that real estate brokers should be mindful of.
Agency Disclosure
RPL §443 requires brokers in residential transactions to disclose their agency status to the parties in a transaction. The Department of State publishes a compliant form in two variants:
The form must be provided to a client before a brokerage agreement is signed (RPL §§443(3)(a) & (c)), and must be presented to the party on the other side of the transaction “at the time of first substantive contact” (RPL §443(3)(b)).
Notification of Fair Housing Laws
19 NYCRR §175.28 requires brokers to provide prospective purchasers, tenants, sellers, and landlords upon first substantive contact a disclosure notice furnished by the Department of State containing pertinent provisions of the Human Rights Law.
A copy of the notice can be found HERE.
19 NYCRR §175.28 requires the display of a similar notice in every office and branch office operated by a broker. A copy of the display notice can be found HERE.
Tenants’ Right to Request Reasonable Accommodations
9 NYCRR §466.15 requires brokers, in addition to housing providers and property managers, to provide prospective tenants, upon first substantive contact, with a notice regarding their right to available housing accommodations. The form of the notice is set forth in §466.15(e) and is reproduced HERE. “Housing Providers” are also required to post a copy of the notice on any website they maintain (9 NYCRR §466.15(d)(3)). Housing Providers are defined in §466.15(c)(1) and can include real estate brokers depending on their function.
Notice of Rights As a Recipient of Housing Assistance
Newly adopted in August of 2022, 9 NYCRR §466.16 requires “Housing Providers” to provide recipients of public housing assistance a notice of their rights concerning discrimination on the basis of lawful source of income. The form of the notice is set forth in §466.16(e) and is reproduced HERE. “Housing Providers” are also required to post a copy of the notice on any website they maintain (9 NYCRR §466.16(d)(2)). Similar to the Notice of Tenants’ Right to Request Reasonable Accommodations, the definition of a Housing Provider for this section also can include brokers depending on their function.
Standard Operating Procedures
Effective April 20, 2022, RPL §442-h(4) requires all brokers to create standard operating procedures addressing the following items:
- Whether prospective clients shall show identification;
- Whether an exclusive broker agreement is required;
- Whether pre-approval for a mortgage loan is required; and
- Any other such standard operating procedures as the Secretary of State shall determine by regulation and upon notice and public hearing.
The standard operating procedures must be date stamped, notarized and posted on any publicly available website and mobile device application maintained by the broker, with hard copies available upon request (RPL §442-h(4)(b)). As of the date of the blog, the Secretary of State has not instituted any additional standard operating procedure requirements, but regulations can change.
Regulatory Compliance is Complicated
These notices just scratch of the surface of real estate brokerage regulatory compliance and risk management through best practice. If you are unsure of your company’s procedures, retain counsel experienced in this highly regulated industry.