Governor Paterson Signs Commission Escrow Act into Law!

Randy L. Kaplan
Director of Government Affairs

After more than 20 years of striving for a law that would protect their rightfully earned commissions - New York State REALTORS® got their wish when Governor David Paterson signed the Commission Escrow Act into law on August 8, 2008. The law will go into effect on January 1, 2009.

REALTORS® from around New York State applaud Governor Paterson, our Prime Legislative Sponsors Assemblyman Michael Gianaris (D-Astoria) and Senator Dale Volker (R-Depew), all of our Co-sponsors in both the Senate and the Assembly and the efforts of the entire LIBOR and NYSAR membership for bringing this long overdue measure onto the law books in New York.

Assemblyman Michael Gianaris especially needs to be commended on his incredible efforts in leading the charge for this bill through the Judiciary Committee. Had it not been for his belief in the merit of this legislation – we would not have a law today. The Assemblyman led this bill through the Committee process in an unprecedented way despite strong opposition from the Judiciary Committee Chair!

Against all-odds, the Commission Escrow Act, which was already unanimously passed by the Senate, reached the Assembly where it passed by an overwhelming majority 112 to 7. Following our consistent outreach efforts including member participation in online Calls for Action, grassroots advocacy, Lobby Day visits with the lawmakers and the hard work of the bill’s sponsor, the measure moved through the Assembly’s complicated committee process. Finally it made it to the floor of the Assembly for debate on the final evening of the legislative session.

During the floor debate – LIBOR’s delegation of Assembly Members came through! Prime Sponsor Michael Gianaris led the support with Dave McDonough (R-Levittown); Bob Barra (R-Lynbrook); Joe Saladino (R-Massapequa); Mark Weprin (D-Little Neck); Phil Boyle (R-Bay Shore) and Chuck Lavine (D-Glen Cove) all speaking eloquently on this bill and why it is desperately needed.

In addition special thanks go out to Carol Gallo-Turschmann, LIBOR’s Commission Escrow Sub Committee Chair and NYSAR’s Commission Escrow Working Group Vice Chair, who worked tirelessly for years spearheading the efforts on both the state and local level to make sure that this bill became law!

There is another person who deserves a thank you and that is LIBOR Commission Escrow Act Sub Committee Vice Chair Lou Gutin, who singlehandedly brought life back into this legislation which was all but dead just a few years ago.

Carol and Lou contributed much to this legislative victory. For years they constantly tried to improve upon the legislation so that our chances of victory were increased. These two individuals never stopped thinking about the Commission Escrow Act during this entire process and we thank them from the bottom of our hearts!

In 2006 the Commission Escrow Act passed both the Assembly and Senate. Unfortunately, then-Governor George Pataki vetoed the bi-partisan legislation when it reached his desk.

After careful review of Governor Pataki’s veto memo, NYSAR’s Duncan MacKenzie and Mike Kelly worked to get a subsequent bill introduced during the 2007-08 legislative session. This legislation was the product of negotiations between several interested organizations including the New York Department of State, the State Consumer Protection Board and was designed to balance the concerns of all parties involved in broker-assisted residential real estate transactions. 

In addition, following Gov. Pataki’s veto in 2006, NYSAR commissioned an independent survey, which found that 28 percent of those questioned had lost an earned sales commission in the last 24 months and 36 percent reported having lost a commission since entering the industry. These numbers clearly demonstrated that the current law was inadequate and did not serve as a deterrent to illegal non-payment of a commission. The overwhelming figures from the lost commission survey provided a strong foundation for justifying the need for this bill.

NYSAR’s Legal Counsel Anthony Gatto will present webinars in September explaining how the new law affects REALTORS® in New York State. During the webinars, Gatto will cover: the proper procedures to comply with the law; how to avoid potential issues; and what liability a REALTOR® may face if they fail to comply with the law. By the end of the webinars, attendees will have a basic understanding of the law and be aware of their rights and liabilities. Gatto will also conduct a brief Q&A session at the conclusion of the webinars.

LIBOR will be instituting seminars and such to educate our members as well. Stay tuned for more details.

###

The Long Island Board of REALTORS®, Inc. (LIBOR) is a non-profit trade association consisting of more than 19,000 professional Realtors®. For more information about LIBOR or how to locate a Realtor® in your area, visit our web site at: www.mlsli.com™.