1. Broker Fee Law NYC: the Initial Rental Agreement
A client engaged a real estate broker to find a residential apartment for rent in Manhattan.
After a successful search, the parties signed a brokerage agreement that included a clause for a potential future purchase, a detail often overlooked but critical under broker fee law NYC.
The Disputed Sales Commission Clause
The signed agreement contained a specific provision.
It stated that if the tenant later purchased the apartment, the broker would be entitled to a commission of 2% of the sale price.
The client, focused solely on renting, signed the document, believing it to be a standard rental agreement.
He was not given any specific explanation about this sales commission clause, which is a key point of contention under broker fee law NYC.
2. Broker Fee Law NYC: the Unexpected Purchase Opportunity
Approximately two years after signing the lease and moving in, the tenant's landlord decided to sell the property.
The tenant, having established a home in the apartment, became interested and eventually purchased it directly from the landlord.
This transaction occurred long after the initial rental services were completed and without any involvement from the original broker, creating a complex situation regarding the broker fee law NYC.
The Broker'S Claim
Following the sale, the real estate broker asserted a claim for 2% of the purchase price.
The broker argued that the original agreement entitled them to this commission.
They contended that by introducing the tenant to the property, they were the "procuring cause" of the eventual sale, a fundamental concept in broker fee law NYC.
3. Broker Fee Law NYC: Sjkp'S Defense Strategy
When the broker filed a lawsuit, the tenant sought legal counsel from SJKP.
SJKP's attorneys developed a twofold defense strategy grounded in established New York legal principles.
The defense focused on the lack of the broker’s involvement in the sale and the unenforceability of the contract clause under the specific circumstances, both of which are central tenets of broker fee law NYC.
Challenging the "Procuring Cause" Doctrin
SJKP argued that under New York's "procuring cause" doctrine, a broker is entitled to a commission only if they bring the parties to an agreement on all essential terms and are the direct and proximate link in the chain of causation leading to the sale.
In this case, the broker had no role in the sale negotiations.
The transaction occurred nearly two years after the rental agreement was signed, and the broker provided no services related to the purchase.
SJKP contended that under New York law, a broker must demonstrate a direct and proximate link between their efforts and the ultimate transaction.
In this matter, the nearly two-year lapse and the broker’s complete absence from the sale negotiations severed any continuous chain of causation required under broker fee law NYC.
Arguing Lack of Contractual Clarity
SJKP's second argument focused on the client’s understanding when he signed the initial contract.
The tenant's clear intent was to rent an apartment, not to purchase one.
He had never been given a separate explanation regarding the sales commission clause and had signed numerous similar agreements that appeared standard for renters.
Therefore, the clause lacked the clear and unequivocal language necessary to bind the tenant to a future sales commission obligation, particularly where the agreement was presented in the context of a residential rental transaction.
4. Broker Fee Law NYC: the Court'S Favorable Ruling
The Supreme Court of New York, New York County, reviewed the arguments and evidence presented by both sides.
The court ultimately ruled in favor of the tenant, dismissing the broker’s claim entirely.
Court'S Rejection of the Broker’S Claim
The court found the broker was not the procuring cause of the sale.
It noted the significant time lapse and the broker's complete absence from the purchase negotiations.
Furthermore, the court deemed the sales commission clause within the rental agreement to be insufficiently clear and lacking the explicit explanation required to bind the tenant to such a significant future obligation.
The ruling highlighted that such clauses cannot be quietly embedded in rental agreements without full disclosure, a decision that aligns with the consumer protection aspects of broker fee law NYC.
The court dismissed the broker's claim in its entirety, relieving the tenant of any obligation to pay a commission.
Disputes over brokerage agreements can be complex and financially taxing.
Understanding your rights under the broker fee law NYC is essential whether you are renting or buying property.
If you find yourself in a similar situation facing an unexpected commission claim, the experienced attorneys at SJKP can help protect your interests.
Contact SJKP for a consultation to discuss your case.
26 Feb, 2026
