This is a letter from New York State’s Deputy Secretary of State Renato Donato, Jr. in response to a real estate agent’s question regarding co-broking and whether a listing broker was required to work with a buyer’s agent and also share commission with that buyer’s agent.
January 24, 2001
Dear Mr. Colby:
Secretary of State Treadwell has asked me to review and respond to your letter of January 18, concerning the relationship between a listing broker and a buyer’s broker.
In prior opinions, the Department of State has stated that a listing’s broker must always honor the buyer’s right to be represented by his or her own broker, and that the listing broker cannot refuse to work with a buyer’s broker. The listing broker is not, however, obligated to share the sales commission with the buyer’s broker unless, prior to the sale, the two brokers have agreed to do so.
A listing broker cannot refuse to work with a buyer’s broker because that refusal would deny the buyer the right to be represented by the broker of his or her choice. Any such denial by a listing broker will be construed by the Department of State as a violation of the listing broker’s duty to deal honestly, fairly and in good faith with the buyer. In addition, a listing broker cannot honor the seller’s instruction not to work with buyer’s brokers because compliance with that instruction would also violate the listing broker’s duty to deal honestly, fairly and in good faith with buyers. If a seller chooses to use the services of a real estate broker, the seller must do so with the understanding that the broker cannot refuse to cooperate with real estate brokers who represent buyers.
With regard to showing the property, the buyer has the right to have the buyer’s broker present when the property is shown to the buyer, and the listing broker cannot impose any conditions that would frustrate buyer representation or place unnecessary obstacles in the path of buyer representation.
These general rules apply to all listings, including open listings, MLS listings and office exclusives.
I hope that this information is helpful. If you have any further questions about these issues, please call me at [redacted].
Renato Donato, Jr.