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Hamptons Rentals: Does It Pay To Rep A Rental?

John A. Viteritti by John A. Viteritti
March 27, 2014
in Real Estate
Home Real Estate

The real estate industry across the Hamptons and North Fork is big business when it comes to rentals, especially when the price tag can be upwards of $500,000 for the Memorial Day to Labor Day summer season. That translates to nice commissions for brokers. We spoke to several East End real estate pros to find out how it all works out from listings, to commissions, to potentials sales.

“We charge a flat rate of 10%,” says Joseph Kazickas, Managing Broker, Rosehip Partners Real Estate, East Hampton. “The commission may be reduced in the event of renewals. We normally have the first rental payment deposited in our escrow account from which we deduct the fee and remit the balance to the landlord.”

Contrary to what may be presumed, who pays the broker’s commission, landlord or tenant, is not a matter of law. The broker may collect from either party as long as it made clear from whom the broker is collecting.

Alice Bell, Senior Vice President Brokerage Manager, Sotheby’s International Realty, told Hamptons.com, “We charge a 10% fee on short-term or long-term rentals. Either the landlord or the tenant may pay, but it is usually the landlord. There are more and more Exclusive Right to Rent Rental Agreements, especially when the house is on the market for sale or is a very high-end rental. Splits between the agencies range from 50/50 to 90/10.”

“We follow what has been the customary practice on the South Fork of a commission of 10% of the total rent for the season, payable by the landlord,” said Ed Reale, Senior Managing Director, Brown Harris Stevens, Southampton. Sarah Minardi, Associate Broker, Saunders, Southampton, concurred, “The landlords pay a commission to Saunders of 10% of the gross rental fee. We have a $500 minimum fee-for-service requirement.”

With the idea of a 10% fee on rentals considered standard practice among the East End pros we spoke to we wondered about re-rents. Turns out that if a broker rents a landlord’s house to a tenant for the season, and the tenant re-rents the same house from the landlord for the next season, the broker is not entitled to another commission unless there is an agreement between the landlord and the broker stating so. Further, if the tenant should buy the home from the landlord during the term of the lease or after, the broker is not entitled to a commission on the sale unless there is an agreement between the landlord and the broker stating so.

With a 10% fee as the norm and pretty clear rules about who pays what, we asked our experts about the challenges in the booming North Fork and Hamptons rental market.

“The fee structure I have established is 10% of the seasonal rental, paid by the landlord, and on year-round rentals, the fee is equivalent to one month’s rent, paid by the tenant,” explains Michael Herbert, Broker, Community Rentals, Mattituck. “All this is negotiable depending on the circumstances, but generally, this is the structure. With regards to an option for an additional term, that must be written in the Lease Agreement to the specifics between landlord and tenant. The greatest challenge I find in my business is establishing monthly rents to what I determine to fair and reasonable. It aches me to witness what tenants are currently paying in rent, simply to put a roof over their head. Very challenging times, but let’s do the best we can to help one another.”

“Landlords, please get the photos to us,” implores Barbara Lester, a Salesperson with Hamptons Realty Group in Amagansett. “We go out as much as possible to photograph but it is impossible to get everyone. We have hundreds of listings that don’t have any photos at all. I skip right over them. In this day and age of the Internet there is no reason for a ‘no photo’ listing. So if you call us and wonder why your house hasn’t rented, check the photos, they could be non-existent, outdated, or just bad photos. Working together makes all the difference. I [have] seen this first-hand. My input to tenants would be to start your search early in the year, give your agent time to prepare the file, and do your best to try to make a decision quickly.”

Considering the complexity of the practice of renting, landlords and tenants should seek legal counsel before entering into the rental market and be sure to work with a pro.

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John A. Viteritti

John A. Viteritti

John is a St. John's University graduate, licensed Real Estate Broker, DOS Certified Instructor, and real estate consultant. He previously taught at NYU, LIU, and The Cook Maran Real Estate School, which he helped found.

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I had never heard of veganwagon.com until meeting the owner of the business, Mino Netta, who is a high energy and spiritual person that runs a vegan lifestyle business with her husband? What’s a vegan lifestyle business you ask? I had the same question. Essentially, Vegan Wagon puts together events that revolve around the vegan lifestyle. Mino Netta’s husband is the head chef of the business and is a vegan lifestyle influencer. Alex Cheblal is a 5-star gourmet French Chef that specializes in plant based cuisine. As a vegan chef, he has personally immersed himself into the lifestyle for the last 22 years. @veganwagonchefalex

Read the full article at Hamptons.com (Link in Bio) #hamptons #plantbased #vegan #private #dinner #hamptons
  • Guild Hall Summer Gala to Honor Philanthropist Kathy Rayner

Guild Hall announced today they will honor philanthropist Kathy Rayner at their upcoming Summer Gala on Friday, August 19 at Mulford Farm in East Hampton. Mrs. Rayner will be recognized for her establishment of the Guild Hall William P. Rayner Artist-inResidence program, in honor of her late husband, artist Billy Rayner, which offers artist collectives the time and space to research, experiment, and develop new ideas while living on the East End. @guild_hall

Read the full article at Hamptons.com (Link in Bio) #hamptons #guildhall #summergala #summer #benefit
  • Make Rita Cantina’s Delicious Watermelon Margarita

Rita Cantina offers delicious Mexican cuisine and innovative cocktails. Their signature margarita recipes are composed of deliciously flavorful and seasonal ingredients, refreshing for this summer heat. @rita_cantina

These hot summer days call for a refreshing watermelon margarita recipe by margarita expert Adam Miller: 

Watermelon Margarita
Created by Adam Miller at Rita Cantina (Springs, NY)

● Ingredients
○ 2oz Blanco tequila
○ 1 oz watermelon juice
○ 1 oz lime juice
○ .75 oz simple syrup

● Method
○ Juice lime and watermelon fresh. Make a 1:1 simple syrup with cane sugar.
○ Combine all ingredients in a shaking tin and shake—fine strain over fresh ice. Garnish
with a lime wedge and drink!

● Glass
Double Old Fashioned Glass or Rocks Glass (12.5 oz and above)

Read more about Rita Cantina at Hamptons.com (Link in Bio) #ritacantina #mexican #margaritas #summer #tacos #springs #hamptons
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This summer, Dria Murphy, wellness expert and brand builder, launched by dria, a curated shoppable lifestyle site of “the best of” products within wellness, beauty, interiors and fashion according to her point of view. Through her experience working with many brands and products in these spaces, she discovered that more does not equal better; so to cut through the noise, she was inspired to create this shoppable outlet to share everything she has tested, learned and love. If she wouldn’t wear it, try it, visit it, taste it, sip it or swear by it – it doesn’t make the by dria cut. She also curates a round up of chic, new and noteworthy products you should buy called the au courant edit that drops every month. @driamurphy @tarynwinterslingerie

Read the full article at Hamptons.com (Link in Bio) #fashion #womenempowerment #hamptons #lifestyle #bydria
  • Intriguing Location in Wainscott

7 East Gate Road, Wainscott, NY 11975
Saunders Co-Exclusive: $3,995,000

Located right in the very heart of the Hamptons, this terrific home is close to the places you want to be. The Wainscott Beach is less than 2 miles away. There’s a Jitney stop down the street, not to mention much-loved Levain Bakery, The Seafood Shop, Goldberg’s Famous Bagels, La Capannina Pizza and Wainscott Main Wine & Spirits. Also Wolffer Vineyards sunsets are right down the road. The location is hard to beat; get to Sag Harbor, East Hampton and Bridgehampton easily, in minutes. @divahands @hamptonsrealestate

Read the full article at Hamptons.com (Link in Bio) #hamptons #hamptonsrealestate #luxuryrealestate #saunders #hamptons
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Read the full article at Hamptons.com (Link in Bio) #hamptons #theater #baystreet
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