N.Y. Real Property Law § 294-b: Recording brokers affidavit of entitlement to commission for completed brokerage services

§ 294-b. Recording brokers affidavit of entitlement to commission for

completed brokerage services. 1. A duly licensed real estate broker who

asserts that he or she has produced a person who was ready, able and

willing to purchase or lease all or any part of a parcel of real

property or any interest in a cooperative apartment pursuant to a

written or oral contract of brokerage employment between the owner of

said parcel of real property or interest in a cooperative apartment and

such broker, and who asserts that such person or a party acting on his

or her behalf subsequently contracted to purchase or lease, or did

purchase or lease such real property or any part thereof, or any

interest in a cooperative apartment and who asserts that he or she is

entitled to a commission pursuant to such written or oral contract, may

file an affidavit of entitlement to commission for completed brokerage

services in the office of the recording officer of any county in which

any of the real property is situated.

2. Such affidavit shall include: (i) the name and license number of

the broker claiming the commission; (ii) the name of the seller or

person responsible for commission; (iii) the name of the person

authorizing the sale on behalf of the seller, if any, and the date of

such authorization; (iv) a copy of the written agreement, if any; (v) a

description of the real property or interest in the cooperative

apartment involved; (vi) the amount of commission claimed; (vii) a

description of the brokerage services performed; and (viii) the dates

thereof. Recording such affidavit shall not invalidate any transfer of

real property or lease thereof. Such affidavit shall not be deemed to

create a lien and shall be discharged one year after filing.

3. Upon receipt by the county clerk of a broker's affidavit of

entitlement to commission for completed brokerage services for the

purpose of recording, entering and indexing, the clerk shall record such

affidavit in the lien docket and shall note thereon that such notice

does not constitute a lien nor shall it invalidate any transfer or

lease. In payment for said services the county clerk shall be entitled

to receive a fee equivalent to that received for recording a deed and

pages thereof.

4. (a) Within five business days after filing the affidavit of

entitlement, the broker shall serve a copy of such affidavit, along with

the fee required pursuant to paragraph (c) of subdivision five of this

section, upon the seller by registered or certified mail, return receipt

requested or by personal delivery, to the address set forth in the

written contract of brokerage employment. If the delivery of the deed or

delivery of the stock certificate and/or proprietary lease will occur in

five business days or less from the filing of the affidavit of

entitlement, then the broker shall personally deliver a copy of the

affidavit of entitlement to the seller. Where there is more than one

seller, service upon one seller shall be deemed sufficient to meet the

requirements of this paragraph. Failure to serve the affidavit of

entitlement upon the seller pursuant to this paragraph shall cause a

forfeiture of the broker's rights under subdivision five of this

section. In the event the seller fails to deposit any monies pursuant to

paragraph (a) of subdivision five of this section, the seller shall

immediately return the fee provided by the broker.

(b) If the seller is represented by an attorney and has provided the

attorney's contact information to the broker prior to the filing of the

affidavit of entitlement, the broker shall provide a copy of the

affidavit of entitlement to the seller's attorney via mail, facsimile,

e-mail, personal delivery or any other agreed upon method within five

business days of the filing of the affidavit of entitlement. Failure to

deliver a copy of the affidavit of entitlement to the seller's attorney

pursuant to this paragraph shall not cause a forfeiture of the brokers

rights under subdivision five of this section.

5. (a) Whenever an affidavit of entitlement by a duly licensed real

estate broker, which includes a written contract of brokerage employment

containing the notices set forth in paragraph (j) of this subdivision,

has been recorded pursuant to this section prior to the delivery of a

deed in connection with a sale of all or any part of a parcel of real

property, or delivery of the stock certificate and/or proprietary lease

in connection with the sale of a cooperative apartment, and the broker

does not receive the compensation called for under the terms of such

written contract at or prior to the delivery of the deed or delivery of

the stock certificate and/or proprietary lease, the lesser of the net

proceeds of the sale or the amount of the unpaid portion of the

compensation agreed to in such written contract shall be deposited by

the seller, at the time of delivery of the deed or delivery of the stock

certificate and/or proprietary lease, with the recording officer in

whose office such affidavit of entitlement had been recorded.

(b) In the event multiple affidavits of entitlement are filed in

connection with a sale of real property or any interest in a cooperative

apartment pursuant to this section, the seller shall be obligated to

deposit an amount equal to the lesser of the net proceeds of the sale or

the greatest amount of the unpaid portion of the compensation agreed to

in the written contracts of brokerage employment attached to the

multiple affidavits of entitlement.

(c) Upon deposit of any monies pursuant to paragraph (a) of this

subdivision, the recording officers shall be entitled to receive a fee

of twenty-five dollars, which shall be paid by the real estate broker.

The real estate broker shall make the twenty-five dollar fee payable to

the recording officer in such form of payment that is accepted by the

recording officer.

(d) The monies deposited with the recording officer pursuant to this

subdivision shall be held pursuant to subdivision (b) of section

twenty-six hundred one of the civil practice law and rules until the

rights of the seller and broker to such monies have been determined by

order of a court of competent jurisdiction as provided in this

paragraph. All deposits of money pursuant to this subdivision shall be

deemed paid into court and shall be subject to the provisions of article

twenty-six of the civil practice law and rules, except as otherwise

provided in this subdivision. An order for the payment of such monies to

the broker or seller may be made in any action or proceeding determining

or declaring the entitlement, if any, of the broker to compensation

under the written contract of brokerage employment recorded with the

affidavit of entitlement or as otherwise provided in rule twenty-six

hundred six of the civil practice law and rules or, whether or not an

action or proceeding has been commenced, may be based upon a stipulation

signed by the seller and the broker. Any application for an order

pursuant to this paragraph made by the broker or the seller shall be on

motion with notice to the other party, except that an application based

upon a stipulation signed by the seller and the broker may be submitted

without notice if the stipulation so provides.

(e) If neither the broker nor the seller commences an action or

proceeding described in paragraph (d) of this subdivision within sixty

days from the day of deposit of monies pursuant to paragraph (a) of this

subdivision, which time limit shall not be extended, the seller, upon

petition, shall be entitled to an order directing the payment to the

seller of such monies out of court, including any accrued interest

thereon, less any fees to which any public officer may be entitled

pursuant to law, but such an order shall not be deemed to determine the

broker's claim for a commission.

(f) Notwithstanding any other provision of law to the contrary, upon

the seller making the deposit required by paragraph (a) of this

subdivision, any action or proceeding based upon the contractual

obligation to pay a commission under the contract of brokerage of

employment shall be commenced by the broker within six months of the

deposit of the monies pursuant to paragraph (a) of this subdivision.

(g) The obligation to deposit monies pursuant to this subdivision or

the seller's failure to do so shall not constitute or be deemed to

create a lien or encumbrance against any real property. Any violation of

this subdivision shall not invalidate any transfer of real property.

(h) In any action or proceeding commenced pursuant to this subdivision

when the seller has not made the deposit required by this subdivision,

and it is determined by a court that the broker is entitled to

compensation pursuant to the written contract of brokerage employment,

the broker shall be awarded costs, including the fee paid pursuant to

paragraph (c) of this subdivision, and reasonable attorneys' fees.

(i) Nothing in this subdivision shall be construed to prohibit a

broker from waiving a seller's obligation to deposit money under this

subdivision, provided such waiver is set forth in an instrument signed

by or on behalf of the broker. Such instrument may be a written contract

of brokerage employment or any other instrument.

(j) The provisions of this subdivision shall only apply when the

written contract of brokerage employment contains the following

statement to the seller in clear and conspicuous bold face type:

"At the time of closing, you may be required to deposit the broker's

commission with the county clerk in the event that you do not pay the

broker his or her commission as set forth herein. Your obligation to

deposit the broker's commission with the county clerk may be waived by

the broker."

(k) The provisions of this subdivision shall only apply to real

property improved by a one to four family dwelling and to individual

condominium units and individual cooperative apartments where the one to

four family dwelling, condominium unit or cooperative apartment is used

or occupied, or intended to be used or occupied, wholly or partly, as

the home or residence of one or more persons.