Property Grunt

Saturday, March 26, 2005

Rental SOL: Broker gets their commission. But was this a rogue agent?

The soap opera of the curbed reader has concluded with the broker getting paid, albeit, a reduced fee.

Considering the cloak and dagger foreplay that was going on, the broker should consider himself lucky for getting paid at all. After reading the conclusion of this entry I suspect that the broker was doing business on his own without the knowledge or the authorization of his company. Remember, an agent needs to be sponsored to work in the field which is probably the only reason he is associated with the company.

The red flag was that the fee was being paid in cash. Any respectable brokerage company has their fees paid in certified checks. Also the original check was addressed to another company instead of the one the broker was associated with.

I realize now the lack of business cards, sign in sheets, fee forms and the fact that the agent did not partake in the application and lease signing was not due to unprofessionalism or carlessness. The broker probably did not want to create a paper trail for his company to follow and by limiting his visibilty and utilizing other tactics of CYA, both the landlord and agent had official denialability if they were caught.

What the broker probably did was make a deal with the landlord to do the openhouse, no questions asked as long as he got a well qualified tenant and the broker received his fee. Because the landlord did his own credit checks there was no need to bring this to his company's attention therefore leaving his employer in the dark. Why would a landlord go along with this? Because most likely the landlord doesn't care who gets paid what as long as there is a qualified tenant in the apartment.

The Curbed reader could have actually blackmailed the broker in getting a no fee deal at the risk of exposing the agent's alleged extra curricular activities to his sponsor which are grounds for dismissal and even revocation of his license. This probably explains why the broker was so flexible about the negotiations since he was most likely keeping the spoils to himself and wanted to avoid a confrontation with his client.

People had responded to Curbed yesterday saying that the broker was in the right and that I was looking to duck out on paying. But I have to ask them doesn't all of this secrecy and duplicity bring anything into question? Or are they brokers that employ similar tactics?

If my suspicions are correct, the broker is not in the right at all since he is probably not sharing the fee with his sponsor. Unfortunately, these types of shennanigans do occur in the rental business. The Grunt hears of stories of brokers playing with the gray line which he will tell for another time.

If you are an agent considering ripping off your sponsor. I strongly advise against it. If you are caught, they will eviscerate you through the court system and hang your entrails on a pike for all to see as a warning to all brokers.

The Grunt was happy to play a minor role in this caper and here's the entry that the Curbed reader was referring to if you want to check on the license of an agent or broker.