Broker Didn't Advise Tenant She Also Owned the Apartment

Former tenant of a two-family house sued landlord, who was also his real estate broker, seeking a refund of $2,900 he paid to landlord when he rented the apartment. Landlord, in turn, counterclaimed for $5,000, claiming nonpayment of rent and damage to the property. Tenant said that when he moved into the unit in 2018, he paid a $2,400 cash broker's fee to the landlord. He also paid landlord $500 to be applied toward the cost of replacing the building's hot water heater. The court ruled for tenant and awarded him the full $2,900. The court also dismissed landlord's counterclaim.

Landlord appealed and lost. The appeals court found that the small claims court had rendered substantial justice between the parties. Landlord claimed that she told tenant at the time of the rental that she owned the apartment. But that was insufficient. RPL Section 443(4)(b) requires that a broker must give a disclosure statement to a tenant before entering into an agreement. The tenant either has to sign the form or, if he refuses, the agent must sign a statement of the facts of refusal. This requirement applied even if RPL Article 12-A otherwise permitted a real estate broker to act as the broker and receive a commission for property that he or she owns. Here, landlord didn't show that it had obtained or sought signing of the form.

Jean v. Stennett: Index No. 2019-1542KC, 2022 NY Slip Op 50618(U)(App. T. 2 Dept.; 7/1/22; Aliotta, PJ, Toussaint, Golia, JJ)