BARRISTER'S BRIEFING: Refresher on 2021 Regulatory Changes Impacting Real Estate

Happy New Year!! I hope this month’s article finds everyone well and reenergized for 2022. As we return to work in this new year, I thought I would use this article to provide a refresher of the latest-and-greatest of the changes that are impacting your real estate activities. Enjoy.

State of Emergency Executive Order and Cold Calling

There are numerous State of Emergency Executive Orders that are still active. One such Order is based on the current gun violence in New York State and it is effective “until further notice.” While this Order is wholly unrelated to real estate activities it, like all other State of Emergency Orders, requires that real estate licensees refrain from making any cold calls. This means that Realtors may not make unsolicited calls to any member of the public regarding the sale of their home unless they already have a developed relationship with them. A Realtor can call a For Sale by Owner (FSBO) only if they have a potential buyer. They cannot contact the FSBO in order to try to solicit the listing. However, all other types of marketing are permitted (mailers, billboards, social media, Internet, etc.).

I have been made aware of many agents that are ignoring the Orders and they continue to cold call. Such agents are forewarned that in doing so, you are breaking the law. Such an action is criminal and, if forwarded to the Dept. of State, Licensing Division, could result in your license being suspended or revoked.

On a positive note, just last week, at the prompting of NYSAR, a bill was introduced in the legislature to try to sever the cold calling provision from the State of Emergency Orders. We will keep you posted as this develops.

New Bills to Curb Housing Discrimination Signed by Governor Hochul

In late December, Governor Hochul signed numerous bills designed to combat housing discrimination. They were signed with the caveat that portions of the bills would be revised with technical amendments. These amendments will be completed sometime this year. Therefore, many of these changes will not take effect immediately and I have noted the effective dates where applicable. However, all Realtors should be aware of these impending changes.

Increased Licensing Instruction

For brokers: the licensing requirement will go from 120 hours of instruction to 152 hours of instruction. Included in that increase is 30 hours of broker and 2 hours of fair housing instruction.

For salespersons: the licensing requirement will go from 75 hours to 77 hours of instruction. The increase will include 2 additional hours of fair housing instruction (for a total of 6 hours).

This regulation is effective as of Dec. 21, 2022.

Office Manager Requirement

Office managers will be required to have at least 2 years of experience as an associate broker before they will be permitted to serve as an office manager.

This regulation is effective immediately.

Increased Continuing Education Requirement

An additional 2 hours of implicit bias and 2 hours of cultural competency training will be required as part of the overall 22.5 hours of required CE education.

This regulation is effective Sept. 21, 2022.

Implementation of Standard Operating Procedures

The DOS will develop regulations requiring brokerages to institute standard operating procedures and submit them to the DOS, where the DOS will maintain these records. Currently, it is unknown as to what these standard operating procedures will be, but it is contemplated that such regulations may include requirements concerning identification, exclusive agreement usage, financing, pre-approvals, etc. In addition to submitting these procedures to the DOS, brokerages will be required to post them on their websites and mobile apps, as well as make them available to the public at their office.

This regulation is effective April 20, 2022; however, due to the fact that it will still need to go through the regulatory approval process, it is anticipated that the effective date will be some time later in the year.

Increase in Licensing Fees

Salesperson: $10 surcharge
Broker: $30 surcharge

The surcharged amounts will be directed to support fair housing testing.

This regulation is effective Jan. 20, 2022.

Increase in Fines

Maximum fines that can be imposed by the DOS will increase from $1,000 to $2,000. Additionally, the New York State Attorney General’s Office will create an “Anti-Discrimination in Housing” fund and 50% of all the fines will be directed to this new fund.

This regulation is effective Jan. 20, 2022.

New Hotline

The bill directs the Division of Human Rights to establish a hotline for registering housing discrimination complaints.

This regulation is effective April 20, 2022.

HERO Act Still in Effect

The HERO Act requires employers to take steps to ensure the health and safety of employees and public. This act creates similar requirements that Phase 2 of the previously expired Executive Order relating to COVID-19 precautions. Such activities as mask, limited contact, wiping down surfaces, spacing, etc. are still required and must be implemented at open houses and all showings.

NY Mask Mandate

Unless an organization has a vaccine mandate in place, all persons over the age of 2 who can medically tolerate a mask must wear one in an indoor public place. An “indoor public place” is any location that is not a private residence; therefore, masks are required at all open houses and showings.

New York City Vaccine Mandate

Any licensee that conducts business in New York City must now provide proof of vaccination to their broker, even if that brokerage is not in NYC. Brokerages must maintain copies of these records. A “workplace,” for purposes of this mandate means any place where there is more than one person; therefore, this requirement would apply to agents at showings and open houses.

Further, those brokerages that have offices in NYC must prohibit anyone from accessing the brokerage who is not vaccinated, with the exception of those who enter for a brief, limited purpose. Medical and religious exemptions will still apply.

NYSAR/REBNY v. DOS Litigation

The case over whether the DOS overreached with their guidance concerning the paying of commissions was decided. As a result, landlords can continue to pass their commission costs (listing agent and tenant agent) on to the tenant.

Conclusion

These changes only scratch the surface of the changes that have taken place over the past year, and there are certainly more to come. Remember, as a Realtor you are required to know your profession and the regulations related to your activities, so continue to stay abreast of new developments through HGAR, OneKey, NYSAR and NAR announcements and articles.