On July 14, 2018 a
Exhibit,Appendix
was filed
involving a dispute between
Ellyn Berk,
Pamela Goldstein,
Paul Benjamin,
Tony Berk,
and
Houlihan Lawrence Inc.,
for Commercial Division
in the District Court of Westchester County.
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FILED: WESTCHESTER COUNTY CLERK 12/23/2021 04:19 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1051 RECEIVED NYSCEF: 12/23/2021
EXHIBIT 12
FILED: WESTCHESTER COUNTY CLERK 12/23/2021 04:19 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1051 RECEIVED NYSCEF: 12/23/2021
STATE OF NEW YORK
DEPARTMENT OF STATE
ONE COMMERCEPLAZA
DAVID A. PATERSON 99WASHINGTONAVENUE LORRAINE A. CORTÉS-VÃZQUEZ
GOVERNOR ALBANY, NY 12231-0001 sECRETARYOF STATE
MEMORANDUM
July 15, 2010
TO: Honorable Peter J. Kiernan, Esq.
Counsel to the Governor
FROM: Matthew W. Tebo, Esq.
Legislative Counsel
SUBJECT: A.10443-B (M. of A. Bing)
Recommendation No Objection
You requested our comments on the above-referenced bill which would amend Article
12-A of the Real Property Law ("Article 12-A") in relation to disclosure of agency relationships by real
estate brokers and salespersons (hereinafter referred to collectively as "real estate licensees"). The
Department is responsible for administering and enforcing the provisions of Article 12-A.
Pursuant to the common law rule of agency, real estate licenses owe fiduciary duties to
the consumers they represent. Among the various fiduciary duties owed are reasonable care, full and
undivided and full disclosure. Article 12-A currently requires real estate licensees to provide a
loyalty
disclosure form memorializing that they explained to the consumer: (1) who the real estate licensee is
representing in.the transaction; and (2) the duties owed to the consumer based on the type of relationship
entered.
One of the possible agency relationships that real estate licensees can enter into is dual
agency. Under dual agency, the real estate licensee represents both parties to a transaction. In these
cases, where both parties are represented, the real estate licensee cannot provide the full range of
fiduciary duties, such as full and undivided loyalty. The statute currently requires real estate licensees to
obtain an agency disclosure statement from both parties at the time it is clear that a situation has arisen
whereby the licensee would be representing both parties to the transaction. Written consent is required
before the real estate licensee can enter into the dual agency relationship.
The billwould permit real estate licensees to obtain advance consent to dual agency from
consumers. This consent would be obtained at the time of the first substantive contact between the agent
and consumer and would eliminate the need to provide the form later in the agency relationship when a
dual agency relationship has actually arisen. As stated in the Sponsor's Memorandum in Support of the
bill, this would streamline the process of showing property insofar as the consumer would not need to be
presented with a new agency disclosure form prior to certain properties being shown.
Two disadvantages of advanced consent to dual agency, however, are the likely increase
of disciplinary complaints against licensees and a less informed public. In the event that an agency
relationship changes from the broker representing one party, to representing both, the consumers may
WWW,DOS.STATE.NY,US • E-MAIL INFO@DOS,STATE.NY,US
000012
FILED: WESTCHESTER COUNTY CLERK 12/23/2021 04:19 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1051 RECEIVED NYSCEF: 12/23/2021
not know who the broker is actually representing. The bill is clear that advance consent to dual agency
must be 'informed'. As such, the Department is of the opinion that the bill would require real estate
licensees to disclose the benefits and detriments of providing advance consent prior to the form being
executed and to provide later disclosure when the. dual agency relationship has actually been
consummated. Not providing this follow-up disclosure would be a violation of the broker's fiduciary
duties of full disclosure and reasonable care to the. consumer and would be a demonstration of
untrustworthiness pursuant to section 441-c of the Real Property Law.
Condominium and cooperative apartments in buildings containing more than four units
are currently exempt from the disclosure form requirements of section 443 of the Real Property Law.
The bill would eliminate this exemption. The Department of State supports this change insofar as it will
afford all consumers similar rights, regardless of the type of residential property being purchased, sold
or leased.
Based upon the foregoing, the Department of State has no objection to approval of the
bill.
MWT/WAC/mel
CC: Eric Eichenlaub, Esq.
Assistant Counsel to the Governor
²
000013
Document Filed Date
December 23, 2021
Case Filing Date
July 14, 2018
Category
Commercial Division
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FILED: WESTCHESTER COUNTY CLERK 12/23/2021 04:19 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1051 RECEIVED NYSCEF: 12/23/2021 EXHIBIT 12 FILED: WESTCHESTER COUNTY CLERK 12/23/2021 04:19 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1051 RECEIVED NYSCEF: 12/23/2021 STATE OF NEW YORK DEPARTMENT OF STATE ONE COMMERCEPLAZA DAVID A. PATERSON 99WASHINGTONAVENUE LORRAINE A. CORTÉS-VÃZQUEZ GOVERNOR ALBANY, NY 12231-0001 sECRETARYOF STATE MEMORANDUM July 15, 2010 TO: Honorable Peter J. Kiernan, Esq. Counsel to the Governor FROM: Matthew W. Tebo, Esq. Legislative Counsel SUBJECT: A.10443-B (M. of A. Bing) Recommendation No Objection You requested our comments on the above-referenced bill which would amend Article 12-A of the Real Property Law ("Article 12-A") in relation to disclosure of agency relationships by real estate brokers and salespersons (hereinafter referred to collectively as "real estate licensees"). The Department is responsible for administering and enforcing the provisions of Article 12-A. Pursuant to the common law rule of agency, real estate licenses owe fiduciary duties to the consumers they represent. Among the various fiduciary duties owed are reasonable care, full and undivided and full disclosure. Article 12-A currently requires real estate licensees to provide a loyalty disclosure form memorializing that they explained to the consumer: (1) who the real estate licensee is representing in.the transaction; and (2) the duties owed to the consumer based on the type of relationship entered. One of the possible agency relationships that real estate licensees can enter into is dual agency. Under dual agency, the real estate licensee represents both parties to a transaction. In these cases, where both parties are represented, the real estate licensee cannot provide the full range of fiduciary duties, such as full and undivided loyalty. The statute currently requires real estate licensees to obtain an agency disclosure statement from both parties at the time it is clear that a situation has arisen whereby the licensee would be representing both parties to the transaction. Written consent is required before the real estate licensee can enter into the dual agency relationship. The billwould permit real estate licensees to obtain advance consent to dual agency from consumers. This consent would be obtained at the time of the first substantive contact between the agent and consumer and would eliminate the need to provide the form later in the agency relationship when a dual agency relationship has actually arisen. As stated in the Sponsor's Memorandum in Support of the bill, this would streamline the process of showing property insofar as the consumer would not need to be presented with a new agency disclosure form prior to certain properties being shown. Two disadvantages of advanced consent to dual agency, however, are the likely increase of disciplinary complaints against licensees and a less informed public. In the event that an agency relationship changes from the broker representing one party, to representing both, the consumers may WWW,DOS.STATE.NY,US • E-MAIL INFO@DOS,STATE.NY,US 000012 FILED: WESTCHESTER COUNTY CLERK 12/23/2021 04:19 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1051 RECEIVED NYSCEF: 12/23/2021 not know who the broker is actually representing. The bill is clear that advance consent to dual agency must be 'informed'. As such, the Department is of the opinion that the bill would require real estate licensees to disclose the benefits and detriments of providing advance consent prior to the form being executed and to provide later disclosure when the. dual agency relationship has actually been consummated. Not providing this follow-up disclosure would be a violation of the broker's fiduciary duties of full disclosure and reasonable care to the. consumer and would be a demonstration of untrustworthiness pursuant to section 441-c of the Real Property Law. Condominium and cooperative apartments in buildings containing more than four units are currently exempt from the disclosure form requirements of section 443 of the Real Property Law. The bill would eliminate this exemption. The Department of State supports this change insofar as it will afford all consumers similar rights, regardless of the type of residential property being purchased, sold or leased. Based upon the foregoing, the Department of State has no objection to approval of the bill. MWT/WAC/mel CC: Eric Eichenlaub, Esq. Assistant Counsel to the Governor ² 000013