Q: I am a licensed real estate salesperson working on the sale of a commercial property. Am I required to give the New York State Agency Disclosure Form in connection with commercial transactions?
A: No, New York State law only requires that the Agency Disclosure Form (the "Disclosure Form") be given in residential real property transactions. Article 12-A, Section 443 (1) (f) of the New York State Real Property Law defines residential real property as "real property used or occupied, or intended to be used or occupied, wholly or partly, as the home or residence of one or more persons improved by (i) a one-to-four family dwelling or (ii) condominium or cooperative apartments but shall not refer to unimproved real property upon which such dwellings are to be constructed."
However, it should be noted that Title 19, Section 175.7 of the New York Code of Rules and Regulations states, in part, that "a real estate broker shall make it clear for which party he is acting." This regulation is interpreted to impose a duty upon all real estate licensees to disclose which person or entity they are representing in all transactions, regardless of whether the transaction is residential or commercial. Unlike residential real property transactions where the Disclosure Form is required, the disclosure for commercial real property transactions does not need to be in writing.
Important Tip: Although there is no written agency disclosure form required for commercial real property transactions, it is strongly recommended that some type of written disclosure be provided by the real estate licensee so that there is never confusion or doubt as to who the real estate licensee is representing in such transactions.
The Legal Line Question by:
Neil B. Garfinkel
REBNY Broker Counsel
Partner-in-charge of real estate and banking practices at Abrams Garfinkel Margolis Bergson, LLP