Gov. Cathy Hochul said Thursday that a Manhattan real estate agent accused of charging exorbitant finder's fees to tenants has agreed to pay $260,000 in fines and restitution under a settlement with the state. Announced.
The newspaper first reported on the alleged fraud in August 2022, when a tenant was told that a City Wide Apartments broker had paid her $20,000 to secure a rent-stabilized apartment on the Upper West Side. They complained that they were forced to pay nearby fees.
The New York State Department of State, which licenses real estate agents, launched an investigation into the deal and City Wide Apartments, finding that the company had overcharged customers.
The Hochul administration said the Manhattan-based company's agreed-upon settlement includes a $50,000 fine and $210,000 in payments to dozens of tenants, while also accusing it of fee abuse. He credits the Post with exposing the story.
“As our state faces a housing crisis, excessive agent fees are not only unfair, they are a threat to hardworking families who want to call New York home,” Hochul said.
“This settlement doubles down on my administration's crackdown on deceptive business practices and begins the process of making peace for dozens of families. I will protect New York consumers and make New York state more affordable. We will continue to fight to make it a better place to live.”
The paper revealed that Ali Wilford, who was working for City Wide Apartments at the time, demanded an exorbitant fee to rent a one-bedroom unit that cost $1,725 a month.
The tenant said he negotiated $500 off the $20,000 fee and paid $19,500.
This fee was much higher than the typical brokerage fee of 15% of a month's or year's worth of rent.
The state does not impose limits on fees, but says agents cannot charge “exorbitant fees that have no reasonable relationship to the work involved in obtaining the commission.”
“Excessive agent fees add significant costs to already high rental property prices,” said Secretary of State Robert Rodriguez. “The New York State Department recognizes the need for fair and transparent practices in the real estate industry, and this settlement is a testament to our commitment to protecting the rights of tenants. For those who are considering this, please rest assured that the Ministry will pursue those responsible.”
State officials said City Wide Apartments and its agents fully cooperated with the DOS investigation and pledged to change their business practices and fee structure.
City Wide Apartments did not immediately respond to a request for comment.
Hochul said the broker freedom agreement is based on her goal of providing affordable prices to consumers and is intended to protect residents from deceptive business practices.
Mr. Hochul has vowed to overhaul the “buy now, pay later” loan industry as part of his $233 billion executive budget plan. He approved the first major increase in paid medical leave benefits in 30 years. He proposed eliminating copays for insulin in certain insurance plans and combating medical debt.
Anyone who believes a licensed real estate agent is engaging in unethical or illegal conduct should contact the DOS Division of Licensing Services. Submit a complaint form.
