The Real Estate Board of New York (REBNY) is set to make significant changes to broker fees starting January 1, 2024. These revisions will ultimately alter the Universal Co-Brokerage Agreement (UCBA), which governs both REBNY and the Residential Listing Service (RLS) in NYC.
The main change REBNY outlines is that they will ban listing brokers from paying buyer agents, shifting the responsibility to sellers who must now directly pay buyer agents. This change also requires listing agreements to clearly specify the seller’s payment to the buyer’s agent, in an effort to be more transparent.
In addition to the commission payment responsibility shift, other changes include alterations to UCBA’s “opt-out” listings. Real estate brokers now have the option to submit an opt-out form to notify REBNY of listings that property owners do not wish to make publicly available. This allows brokers to share more information about these privately listed properties with each other, a significant shift from the previous regulations, which prohibited any communication about these properties.
Furthermore, the newly revised UCBA will now allow electronic payments for commission and rent deposits, including wire transfers and payments via popular applications like Venmo and Zelle. This change aims to offer greater flexibility for real estate professionals and tenants alike.
Ninve James, the head of REBNY’s residential brokerage services and products, stated that these changes are meant to provide a more efficient RLS. However, the changes arrive at a time when the real estate industry is experiencing nationwide criticism, with lawsuits challenging the National Association of Realtors’ (NAR) Participation Rule.
But, despite the legal hurdles, REBNY claims that the newly introduced direct payment model, as well as their other changes, will positively impact consumers and improve the efficiency of the real estate industry.
Brokers and other real estate professionals are encouraged to familiarize themselves with the newly revised UCBA guidelines to ensure compliance with the updated regulations, as they are quite a significant shift away from what they may be previously used to.
The foregoing is not intended to be comprehensive nor constitute legal advice. If you would like to discuss your specific circumstances or would like more information, feel free to contact us at (212) 625-8505.