Assemblymember Chantel Jackson of the New York legislature introduced a bill that, if passed, would prohibit single-agent dual agency, require representation agreements, and prohibit mandatory broker’s fees in residential real property transactions.

The bill was introduced to the Committee Assembly on April 9, then referred to the Assembly Judiciary. It proposes amendments to various paragraphs of subdivisions of section of real property law to change the real estate agency relationship disclosure statute.

“Single-agent dual agency, the practice of a real estate agent representing both a buyer/tenant and seller/landlord, presents significant challenges,” the justification accompanying Bill No. 2023-A9823 stated. “It impedes agents’ ability to fulfill crucial fiduciary duties like providing reasonable care, undivided loyalty, and full disclosure, as agents must maintain impartiality, resulting in unfair outcomes and a lack of transparency in real estate transactions.”

The bill referred to a report by U.S News and World Report that indicated several states, including Alaska, Colorado, Florida, Kansas, Maryland, Oklahoma, Texas, Vermont, and Wyoming, have banned single-agent dual agency. Those states justified doing so because they stated dual agency fosters inadequate representation and creates negotiation issues.

“Opposing goals between buyers and sellers make it difficult for agents to effectively advocate for their clients’ best interests, leading to conflicts of interest and favoritism,” it stated. “This lack of comprehensive representation leaves tenants and buyers vulnerable to potential exploitation through deceptive advertising, discrimination based on their representation status, and the imposition of unaffordable fees as a condition of entering a lease agreement.”

The bill also stated reports from The New York Times have revealed more than one-third of New York City renters are rent burdened and upfront costs like security deposits and broker fees are the “highest they have been in years,” contributing to the continuing affordability issues in the rental market. The bill further stated requiring broker fees as a condition for entering a lease agreement is another hindrance for prospective buyers’ and tenants’ housing options.

This bill:

• Prohibits single-agent dual agency.
• Mandates clear written representation agreements.
• Prevents the demand of “exorbitant broker fees” before entering into a lease agreement.
• Prohibits discrimination and combats deceptive advertising practices.
• Empowers tenants and buyers to negotiate broker fees and clarifies that they are only obligated to compensate an agent “when they directly hire them and sign a representation agreement.”
• Specifies the timing of signing representation agreements, ensuring they occur before or immediately after an agent shows a property to a tenant for the first time.
• Establishes dedicated representation, reduces conflicts of interest, and promotes transparency in real estate transactions.

“By banning single-agent dual agency, this bill fosters housing affordability and fairness for all parties involved,” the justification concluded.