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Hamptons.com
September 6, 2021

Who Can Be Compensated for Selling and Renting Real Estate?

John A. Viterittiby John A. Viteritti
in Real Estate
Home Real Estate

The most recurring question I receive from readers has to do with real estate commissions; specifically, finders fees, referral fees, who may and who may not receive them, and variations on these questions.

 

The subject is addressed in New York Stateโ€™s Real Property Law beginning with Section 442.

 

In sum it states that in order to make a claim in court for a commision related to the sale or lease of real property, residential or commercial, the claimant must be the holder of a New York State real estate brokerโ€™s license. An associate broker or licensed salesperson can only receive a commission from their sponsoring broker, never directly from a seller, buyer, landlord, tenant or a broker not their sponsoring broker. An exception would be when the associate broker or salesperson leaves the employ of their sponsoring broker before the commission has been paid to the broker. In that event the broker may pay the commission to the associate broker or salesperson whether they are in the employ of another sponsoring broker or the person is no longer active in the real estate business and no longer the holder of a real estate license.

 

In a recent article published by the New York State Association Realtors, Anthony Gatto, Counsel, and Liz Celeone, Associate Counsel discuss the New York State Supreme Court case, Sagacity Intโ€™l Real Estate Advisors, Inc. v. Wiggins (NY 2020) which involves a commission dispute between two real estate salespersons and raises the question as to the enforceability of commission split agreements between real estate salespersons who are licensed under the same real estate brokerage. The court ruled against the salesperson claiming the commission.

 

This also applies to associate brokers and salespersons within the brokerage firm that operate as โ€œteams.โ€ Any commissions earned by the โ€œteamsโ€ must be distributed to each member of the โ€œteamโ€ individually by their sponsoring broker. A commission may not be paid to a โ€œteam leaderโ€ to be distributed to the other members of the team. According to Anthony Gatto and Liz Celeone, this is a common question that comes to them through N.Y.S.A.R.โ€™s Legal Hotline.

 

New York State allows associate brokers and salespersons to individually form an L.L.C. (limited liability company). The broker may pay a commission to an L.L.C.

 

Competing real estate brokers may pay and receive referral fees for referring sellers and buyers, landlords and tenants to other real estate brokerage firms, but the fees may only be exchanged between brokers, never directly to the other firmsโ€™ associate brokers or salespersons. Should the referral involve an out-of-state party, the commission may be paid or received if the out-of-state party is authorized to collect and pay commissions by their state regulatory agency.

 

The most common question pertains to โ€œfinder fees,โ€ the payment of fees to an unlicensed person who refers a seller, buyer, landlord or tenant to a real estate broker who subsequently receives a commission as a result of the referral. That question was answered on May 31, 2011 by the New York State Appellate Division, 2nd Department in the matter of Futersak v. Pearle.

The Court ruled that in order to receive a commission for a sale or rental of real estate, the claimant is required to hold a real estate brokerโ€™s license. The New York Board of Realtors and the New York State Association of Realtors filed amicus curiae briefs with the Court.

 

An exception is an attorney licensed to practice law in the State of New York who may conduct any activity related to real estate without a real estate brokerโ€™s license and receive compensation. It is not true that attorneys are automatically real estate brokers. If an attorney licensed to practice law in New York wishes to employ licensed associate brokers and salespersons, the attorney would first have to acquire a real estate brokerโ€™s license from the New York Department of State. The New York Bar Association has special rules that apply to the attorneyโ€™s role in these situations.

 

Another subject that is addressed in The New York Real Property Law pertains to the payment of โ€œrebates,โ€ parts of commissions paid to sellers, buyers, landlords, and tenants represented by a real estate broker in these transactions. These payments are lawful, provided the broker has earned a commission from the transaction and the payment of the rebates must be disclosed in the closing documents.

 

John is a St. Johnโ€™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. www.johnaviteritti.com

 

 

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Oasis by the Ocean

  • Check out the Top Hamptons Events This Weekend!โ 
โ 
๐Ÿป Back to the Bays x Kidd Squid: Brew for the Bay Release Party!โ 
๐Ÿ“… Friday, May 30, 2025โ 
๐Ÿ•“ 5pm
๐Ÿ“ Kidd Squid Brewery, 11 Spring St, Sag Harbor, NYโ 
โ 
Join us as we toast to conservation! ๐ŸŒŠ๐Ÿบ Proceeds support marine restoration through @ccemarine Back to the Bays Initiative.โ 
โ 
๐Ÿ”— [Click Link in Bio for Event Info]โ 
โ 
๐ŸŽถ Sunset Serenades: A Hamptons Summer Celebrationโ 
๐Ÿ“… Fri, May 30th -31st
๐Ÿ•– 7pmโ 
๐Ÿ“ Various Hamptons Venuesโ 
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An intimate concert featuring THยทFMโ€™s Salon Orchestra, soprano Greer Lyle & more โ€” conducted by Logan Souther. ๐ŸŒ…๐ŸŽปโ 
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๐Ÿ”— [Click Link in Bio for Event Info]โ 
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๐Ÿ† Celebrate Local Legends: Howard & Kenny Woodโ 
๐Ÿ“… Fri, May 30, 2025โ 
๐Ÿ•” 5pmโ 
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โ 
Join the party honoring Suffolk County Hall of Fame icons! ๐ŸŽ‰โ 
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๐Ÿ”— [Click Link in Bio for Event Info]โ 
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๐Ÿ Talkhouse Encore Launch Partyโ 
๐Ÿ“… Sat, May 31, 2025โ 
๐Ÿ•’ 3pm โ€“ 6pmโ 
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FREE entry, tequila pineapple cocktails, music, bites & giveaways! ๐Ÿน๐ŸŽถโ 
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๐Ÿ”— [Click Link in Bio for Event Info]โ 
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๐Ÿงฑ CMEEโ€™s 8th Annual Block Partyโ 
๐Ÿ“… Sat, May 31, 2025โ 
๐Ÿ•™ 10am โ€“ 12pmโ 
๐Ÿ“ CMEE, Bridgehampton, NYโ 
โ 
A FREE morning of crafts, rockets, chalk art & summer camp samplings! ๐Ÿ‘ง๐Ÿง’๐ŸŽจโ 
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๐Ÿ”— [Click Link in Bio for Event Info]โ 
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๐Ÿ˜‚ Saturday Night Comedy at Sticks X Stonesโ 
๐Ÿ“… Sat, May 31, 2025โ 
๐Ÿ•— 8pmโ 
๐Ÿ“ Sticks and Stones Comedy Club, Southampton, NYโ 
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NYCโ€™s top comedy club talent hits the Hamptons! ๐ŸŽค๐Ÿคฃโ 
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๐Ÿ”— [Click Link in Bio for Event Info]โ 
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๐ŸŽฌ Sunset Theater: Karate Kid: Legendsโ 
๐Ÿ“… Opens Fri, May 30, 2025โ 
๐Ÿ• Various Timesโ 
๐Ÿ“ Sunset Theater, Westhampton Beach, NYโ 
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Donโ€™t miss the latest chapter in the Karate Kid saga! ๐Ÿฅ‹โ 
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๐Ÿ”— [Click Link in Bio for Event Info]โ 
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๐Ÿฐ Afternoon Tea at The Baker House 1650โ 
๐Ÿ“… Sun, June 1, 2025โ 
๐Ÿ• 1:30pm โ€“ 4pmโ 
๐Ÿ“ 181 Main St, East Hampton, NYโ 
โ 
Enjoy champagne, sweets & elegant tea service in a historic setting. โ˜•๐Ÿพโ 
โ 
๐Ÿ”— [Click Link in Bio for Event Info]โ 
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Check out more events at Hamptons.comโ 
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#hamptons #weekendโ 
  • Nearly two years after its debut, El Verano offers a taste of upscale Mexican cuisine in a setting inspired by the charm of vacation summer homes in Mexico. Customers enter a vibrant space filled with beautiful greenery and colorful decor as they enjoy dishes rooted in the heritage of acclaimed chef Julian Medina.โ 
โ 
Medina grew up in Mexico City, where his love for cooking first began. In pursuit of his career, he moved to New York City, where he graduated from the French Culinary Institute. Noticing a lack of refined Mexican dining in Southampton, Medina created El Verano to bring the bold flavors of his roots to the area. Blending Mexican coastal charm with rich culinary traditions, El Verano brings something new to the Southampton dining scene.โ 
โ 
Medina shared some of his signature dishes, journey through the cooking field, and highlighted El Veranoโ€™s fresh and locally sourced ingredients that shape each creation.โ 
โ 
Read the interview at Hamptons.com (Link in Bio)โ 
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#elverano #dining #southampton #mexicancuisine
  • NAMIRO made its Southampton debut in style on May 17 with a ribbon-cutting ceremony and VIP cocktail preview, joined by Mayor Manger. Guests enjoyed signature bites and high-energy vibes at this invite-only event.โ 
โ 
Conceptualized by music and hospitality heavyweights, NAMIRO Sushi is more than a restaurantโ€”itโ€™s where sleek design, elevated Asian cuisine, and nightly celebration collide. Located at 76C Jobs Lane in Southampton, NAMIRO opened its doors to the public on May 21 and is open seven days a week, year-round.โ 
โ 
๐Ÿ“ธ: Rob Rich/SocietyAllure.com ยฉ2025 โ 
โ 
Check out the gallery at Hamptons.com (Link in Bio)โ 
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#namirosushi #hamptons #southampton โ 
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โ 
  • Itโ€™s Memorial Day Weekend in The Hamptons! 

So many pop-ups, collaborations, and more! 

๐ŸŽถ Chloe Caillet & Kaytranada at The Surf Lodge
๐Ÿ“ 183 Edgemere St, Montauk, NY
๐Ÿ“… Saturday, May 24 | ๐Ÿ•“ Doors at 4PM

๐Ÿ”ฅ SlowFires NYC x Ruschmeyers Pizza Pop-Up
๐Ÿ“ Ruschmeyers, 161 2nd House Rd, Montauk, NY
๐Ÿ“… Fri, May 23 โ€“ Sat, May 24 | ๐Ÿ•“ 4โ€“9PM

๐ŸŽจ Dolce Vita Pop-Up in Southampton
๐Ÿ“ 95 Main Street, Southampton, NY
๐Ÿ“… Fri, May 23 โ€“ Sun, May 25 | ๐Ÿ•š 11AMโ€“3PM
Dolce Vita x Down the Streetโ€™s Summer Art Series: view new art drops, shop, and enjoy seasonal treats.

๐Ÿ‘œ Landsโ€™ End x Round Swamp Farm
๐Ÿ“ Round Swamp MTK โ€“ 71 S Elmwood Ave, Montauk
๐Ÿ“ Round Swamp BH โ€“ 97 School Street, Bridgehampton, NY
๐Ÿ“… Fri, May 23 โ€“ Sat, May 24 | ๐Ÿ•ฃ 8:30AMโ€“6PM
Get a custom tote with any $200+ purchaseโ€”1 per customer.
๐Ÿ“ธ AD: Ryan Woehler | ๐Ÿ“ท: Chris Klinge | ๐Ÿ‘—: Jenny Huebner | ๐Ÿ“ธ Asst: Dan Kleinschmidt

๐ŸŽค Hello Brooklyn at The Stephen Talkhouse
๐Ÿ“ 161 Main St, Amagansett, NY
๐Ÿ“… Saturday, May 24 | ๐Ÿ•ฅ 10:30PM
Itโ€™s not a true Hamptons weekend without a night at Talkhouse! Dance the night away with Hello Brooklyn.

๐Ÿช Levain Bakery X Johnโ€™s Drive-In
๐Ÿ“ Levain Bakery, 354 Montauk Hwy, Wainscott, NY
๐Ÿ“… Starts May 23 | ๐Ÿ•— 8AMโ€“5PM
Thick, gooey Levain cookies + classic scoops from Johnโ€™s = summer magic.

๐Ÿชฉ Silent Disco Dance Party at Guild Hall
๐Ÿ“ 158 Main St, East Hampton, NY
๐Ÿ“… Sunday, May 25 | ๐Ÿ•— 8โ€“11PM
Dance in the garden!

๐Ÿช Kites for Kids Benefit at Main Beach
๐Ÿ“ 101 Ocean Ave, East Hampton, NY
๐Ÿ“… Saturday, May 24 | ๐Ÿ•‘ 2โ€“5PM
Decorate & fly a kiteโ€”all proceeds benefit the Eleanor Whitmore Early Childhood Center.
๐Ÿ“ธ Photo Credit: John Musnicki

๐Ÿป Jon Divello at Kidd Squid
๐Ÿ“ 11 Spring St, Sag Harbor, NY
๐Ÿ“… Sunday, May 25 | ๐Ÿ•” 5โ€“7PM
Live music + fresh brews = perfect weekend vibes.

๐ŸŒธ Garden Club of East Hamptonโ€™s Garden Party
๐Ÿ“ Mulford Farm, 10 James Lane, East Hampton, NY
๐Ÿ“… Friday, May 23 | ๐Ÿ•• 6โ€“8PM
Enjoy hors dโ€™oeuvres, drinks, and a Silent Auction featuring art, books, and more.

๐ŸŒฟ Jenni Kayneโ€™s Hamptons Kickoff
Celebrate summer with in-store events all weekend long at the Amagansett Store and the Southampton Store!
๐Ÿ“ธ Photo Credit: Holly Sarah Burgess

Tap the link in bio for info!
  • My curiosity piqued when I saw the new, shovel-ready plans at 28 Pepperidge Lane in Amagansett. Included with this nearly two-acre property, are sophisticated and luxurious plans by the firm Resolution: 4 Architecture (RES4). New construction in the Hamptons isnโ€™t easyโ€”but what if your dream home could be architect-designed and delivered directly to you? What is the latest in prefab architecture in 2025?โ 
โ 
To explore this intriguing approach further, Scott connected me directly with Robert Luntz, the co-founder of RES4. See our conversation on redefining luxury through modern modular design, its growing relevance in the Hamptons, and the future of high-end prefabrication.โ 
โ 
For more information about the plans in place at 28 Pepperidge Lane, Amagansett, contact Scott Bradley.โ 
โ 
RES4 has been a pioneer in modern prefab architecture. What inspired you to focus on this method of construction?โ 
โ 
Weโ€™ve spent over two decades innovating ways to deliver exceptional, modern homes efficiently and affordably. Our modular methodology uniquely allows us to combine luxury, precision, and accessibility, transforming the landscape of high-end housing by delivering refined design to a broader market.โ 
โ 
@resolution4architecture @hamptons_waterman_lifestyle @hamptonsrealestateโ 
โ 
โ 
Read the full interview at Hamptons.com. (Link in Bio)โ 
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#architecture #hamptons #hamptonsrealestate #luxuryโ 
โ 
โ 
  • NYC Second Chance Rescue hosted its 5th Annual Rescue Ball Gala โ€” a dazzling evening of compassion, community, and celebration โ€” at Pier Sixty in New York City.โ 
โ 
The event honored two inspiring individuals for their outstanding advocacy and dedication to animal welfare: Martha Stewart, iconic lifestyle entrepreneur and lifelong animal champion, and Dr. Dan Belkin, leading dermatologist and passionate rescue animal advocate.โ 
โ 
Set against the stunning waterfront views of Pier Sixty, the gala brought together philanthropists, celebrities and compassionate supporters to champion NYC Second Chance Rescueโ€™s mission. The night featured a special live performance by Rob Thomas, a special appearance by Georgina Bloomberg, a lively auction led by celebrity host Elvis Duran, host of Elvis Duran and the Morning Show on Z100, surprise guest Alexandra Daddario, and a high-energy DJ set by GEO ROC that kept guests dancing for a cause.โ 
โ 
โ 
๐Ÿ“ธ: Sylvain Gaboury/PMCโ 
โ 
โ 
Check out the full gallery at Hamptons.com (Link in Bio)โ 
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#secondchancerescue #nyc #marthastewart #robthomas โ 
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