Good Form: What You Need To Know About New York's New Broker Disclosure Law

New Yorks New Broker Disclosure LawFor potential buyers browsing Manhattan condo listings and the brokers charged with selling those apartments, Manhattan real estate isn't simple. Anything but, in fact. If you work with the right real estate agent (and take advantage of the right buyer's information resources), finding – and even purchasing – the right NYC condo doesn’t have to be a maddening experience. But it is inherently a complicated one, given the series of interlocking interests that are part of every Manhattan condominium purchase – buyer's agents and seller's agents, owners and buyers, developers and brokers and co-op boards and so on and so forth – that ensure that there's virtually no such thing as a quick, simple Manhattan real estate transaction. Your friendly neighborhood real estate broker would no doubt be happy to explain the myriad ways in which the current system is frustrating, confusing, inefficient and so on, but it is the way that real estate business has always gotten done in New York City. Or it was, at least: a new real estate disclosure law that passed just before the New Year aims to simplify and clarify the apartment-buying process, and to make sure that both brokers and agents understand each other before anyone signs any dotted lines. In recent years, it has been far easier to be skeptical about things coming out of Albany than it is to be optimistic, but in this instance we're offering a tentative thumbs-up. Anything that makes it simpler and less stressful to buy an apartment in Manhattan is good by us. And at first glance, the new disclosure law seems to do just that. So, how did assemblyman Jonathan Bing et al pull this off? In short, by keeping it simple. "The law requires a real estate agent to have clients sign a form stating that they understand whom the agent represents and to whom the agent will give 'undivided loyalty,' as soon as they enter into a relationship," Vivian Toy writes in the New York Times. "The disclosure law is designed to clarify the roles of buyers’ and sellers’ agents, in order to, as the form itself states, 'help you to make informed choices about your relationship with the real estate broker and its sales associates.'"The law is also noteworthy for filling one of the more egregious loopholes in Manhattan real estate. Previously, disclosure forms had only been required, paradoxically enough, in what are NYC's more comparatively simple real estate transactions -- those for single-family homes and buildings with four or fewer units, which generally offer fewer competing interests and hidden ins-and-outs than transactions in, say, a Manhattan mega-condo such as The Visionaire or The Lucida, which tend to be more complicated transactions with more moving parts (and interested parties). The "keeping it simple" part, though, is what really makes the new disclosure law work -- and why both consumer advocates and industry groups such as the Real Estate Board of New York approved of the law. Given the complicated dual loyalties inherent in Manhattan real estate, this new law is going to both clarify the average transaction and make for some lengthy broker-to-buyer explanations. But we're of the mind that more information is always better than less in matters like this, and the disclosure law certainly should help with that. We'll see how it works out, but for now, New Construction Manhattan is on board.

NYC Daily Real Estate Blog