New York’s Fair and Transparent Real Estate Listings Act and the Future of Private Listings

Over the past several years, a growing share of residential listings have been marketed through “private listing networks”, such as office exclusives, members-only platforms, and other restricted channels that expose a property to a chosen subset of brokers and buyers rather than to the open market. New York is now poised to address these listings with the passage of “The Fair and Transparent Real Estate Listings Act” (the “Act” or “Bill”). Assembly Bill A.10679-B (sponsored by Assemblywoman Michaelle Solages), with Senate companion S.10274 (Senator Nathalia Fernandez), have passed both houses of the Legislature and awaits action by Governor Hochul. If signed, it would take effect one hundred eighty days after becoming law. (see NYS Assembly Bill A.10679-B; see also NYS Senate Bill S.10274)

The Legislature’s findings leave no doubt about the target. The Act declares that open and transparent access to listings is “…essential to fair housing opportunity, market competition, and accurate price discovery,” and that practices keeping homes off broadly accessible platforms can shrink the pool of offers, risk lower sale proceeds, and make some homes “…effectively invisible to certain buyers.” In short, public marketing would become the statutory default, and private marketing the documented exception.

What the New RPL §443-b Would Require

The Act adds a new Section 443-b, entitled “Marketing,” to the Real Property Law. A listing agent representing a seller or a landlord of residential real property would be required to: (i) share information about the property with any licensee representing prospective buyers or tenants; (ii) respond to inquiries from those licensees; (iii) make the property available for showings; and (iv) publicly advertise or market the property, at a minimum, on one or more multiple listing services for distribution on MLS participants’ websites, or on internet platforms that are broadly accessible to the general public and do not require payment or require the consumer to work with the listing brokerage to view the listing.

The Act also addresses the hybrid scenario directly, where a property is marketed on “private or limited access channels”. The listing agent must concurrently market it publicly, unless the client has signed the statutory opt-out form at or before the time a listing agreement is entered into between the parties. Signed opt-out forms must be retained for at least three years and produced to the New York State Department of State, Division of Licensing Services (“DOS”) upon request. The inclusion of rentals in the final version of the Act is significant. The earlier drafts of the legislation were limited to sales of real property. However, the version passed by both houses of the Legislature extends the same transparency framework to landlords and prospective tenants.

The Client’s Right to Opt Out

The Act does not ban private listings. Instead, similar to the NAR settlement’s approach to compensation, it makes informed, written client consent the gateway. The disclosure and opt-out form is written directly into the statute, and a listing agent “…shall not alter or omit any required disclosure language.” The form requires the seller or landlord to acknowledge, in plain terms, the consequences of restricted marketing: (i) reduced visibility to buyers or tenants; (ii) limited online exposure; (iii) fewer offers and a possible negative impact on price and timing; (iv) restricted marketing channels; and (v) a reminder that no marketing may discriminate against any protected class under federal, state, or local law. The DOS will publish the standardized form and is directed to issue implementing regulations.

Enforcement, Penalties, and a Good-Faith Defense

A violation would constitute grounds for discipline under RPL §441-c, including suspension or revocation of the broker’s or salesperson’s license. The Act also amends §441-c itself, raising the maximum fine from $2,000 to $5,000, with fifty percent of all fine revenue payable to the state’s anti-discrimination in housing fund. Licensees are given one measure of protection. Licensees do have an affirmative defense if they can show that they acted in good faith in fulfilling the statutory duties, unless, however, the licensee made a false, deceptive, or misleading representation. (see NYS Department of State, Real Estate License Law)

Open Questions

The Act is not without its critics, and Members should understand what remains unsettled. Commentators have noted circular definitions, vague marketing standards, and an unusually broad definition of a multiple listing service. One analysis concluded that, until DOS guidance arrives, “…the legislation may be best described as a map drawn in fog.” Brokers should watch for DOS rulemaking on minimum public-listing content, MLS syndication, proof of buyer or tenant representation, showing requirements, and record retention. The timing of the Act going into effect is not set as of yet. Since the Bill has not been formally delivered to the Governor, the constitutional review period has not begun. (see Professional Career Center, New York Private Listing Bill; see also HousingWire, N.Y. Joins States Regulating Private Listing Networks)

Practical Guidance for Members

Although the Act is not yet law, its framework is clear enough that Members can begin preparing now. The following practices will position brokerages to comply from day one:

• Audit your marketing channels now. Inventory any office-exclusive programs, private networks, or restricted platforms your brokerage uses, and identify which listings would require concurrent public marketing under the Act.

• Build the disclosure into your intake process. The opt-out form must be signed at or before the listing agreement is entered into, not after marketing begins. Treat it like the Section 443 Agency Disclosure Form and make it part of the standard listing and initial intake package.

• Paper the file. Signed opt-out forms must be kept for at least three (3) years and produced to the DOS on request. Build the retention protocol before the effective date, not after the first audit letter.

• Treat rentals like sales. The final version applies the same duties to landlords’ listings. Rental-heavy offices should not assume this is a sales-side statute.

• Watch the calendar. If the Governor signs, the Act takes effect one hundred eighty days later, and DOS regulations and the standardized form should arrive within that window. HGAR and NYSAR will keep Members apprised.

Whatever one’s view of the drafting, the direction of travel is unmistakable, in New York and nationally, exposure is becoming the default, and restriction the documented exception agreed to in writing by the client. The focus of this legislation is squarely on the seller’s agent’s fiduciary duty, the obligation to place the client’s interest in the widest market ahead of the brokerage’s interest in controlling the listing. Members who build informed consent and documentation into their listing practice today will find that, if and when the Fair and Transparent Real Estate Listings Act becomes law, compliance is made simple by adding these requirements to what they already do at the time the client is engaged.

About the author: Legal Corner Column author John Dolgetta, Esq. is the principal of the law firm of Dolgetta Law, PLLC. For information about Dolgetta Law, PLLC and John Dolgetta, Esq., please visit http://www.dolgettalaw.com. The foregoing article is for informational purposes only and does not confer an attorney-client relationship and shall not be considered legal advice. The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views or positions of HGAR, its affiliates, or any other entity.