Commission Escrow Act Takes Effect January 1, 2009

On August 5, 2008, Governor Paterson signed into law the Commission Escrow Act, which gives real estate brokers a strategy for protecting real estate commissions which are owed, but not paid, at the time of the closing of a transaction. The law takes effect on January 1, 2009 and applies only to residential real property (1-4 family homes, cooperatives and condominiums).

The attached memo, summarizing the law, was prepared by Neil Garfinkel and circulated to the members of the Real Estate Board of New York.