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Queens Chronicle

Real Estate Cease And Desist Program Restored In Queens

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Posted: Thursday, August 8, 2002 12:00 am

After being in limbo for the past year, Queens’ cease and desist program, which prohibits real estate brokers from soliciting homeowners—by mail, phone. flyers or in person—is back in effect.

However, as in the past, the law only protects those homeowners whose names are registered with the state Department of State.

The real estate industry had taken the issue to court and, last summer, a federal court decision found the program violated the First Amendment rights of real estate brokers.

Local state legislators, such as Assemblywoman Audrey Pheffer and Senator Serph Maltese of south Queens and Senator Frank Padavan of northeastern Queens, asked State Attorney General Elliot Spitzer to mount an appeal which recently overturned the previous court ruling.

However, Pheffer is now awaiting a formal decision from the court to clarify what, if any, restrictions will be placed on the restored program.

“We know the existing list of homeowners will be reinstated and be in effect through 2004,” said Jo Ann Shapiro of Pheffer’s office. “But there is no form or mechanism in place to add new homeowners to the list.”

It is hoped that the new forms will be in place by September. For now, legislators have contacted local civic and community groups to spread the word to residents that they may once again be protected from aggressive and intimidating real estate sales practices.

The entire borough of Queens was declared a cease and desist zone by the state in 1989. The rules were originally adopted 40 years ago to prevent “block busting” and racial steering of potential buyers to particular neighborhoods.

In order to generate sales commissions, ruthless brokers compete with one another and subject homeowners to repeated solicitations to place their homes for sale.

They may suggest that zoning which allows denser development poses a threat to property values. Or, they may tell prospective sellers that illegally subdivided homes in the neighborhood lower property values, then tell potential buyers that large homes can be subdivided to earn income.

Brokers often offer cash for homes as an enticement. Elderly homeowners are often the most vulnerable and popular targets.

“Licensed realtors who are repeat offenders may have their license suspended or even revoked,” Shapiro said. “Individuals who are not licensed are penalized under laws targeting anyone who acts as an unlicensed broker.”

Cease and desist legislation, which levies fines on licensed realtors or individuals who solicit homeowners registered in the program, requires that new lists be compiled every five years. In the past, the list has been updated with new names four times each year.

Now that the cease and desist program has been re-established, if registration proceeds as it has in the past, a new list will be published at the end of October. The deadline for homeowners to be included on that list will probably be October 1st.

Homeowners who have never registered with the cease and desist program, may do so online at www.dos.state.ny.us/lcns/cdform.asp or by contacting their local community group or state legislator. Completed forms will be added to the state registry when the court reaches a final decision.

The list is sent to area real estate brokers who are then restricted from soliciting list members by phone, in writing or in person. Violators face fines up to $1,000.

Many residents think that is not enough to deter real estate brokers who can make much more than that on the commission from the sale of one home in today’s market.

According to a review published by Pheffer’s office in January 2001, 15 realtors in the communities of Woodhaven, Richmond Hill and South Ozone Park who violated the cease and desist law were fined a combined total of only $11,000 in the period from January 1999 to October 2000. The sale of just one $200,000 home could generate more than that in commission.

In light of this, Maltese and Pheffer have been trying to introduce legislation in the state Senate and Assembly that would increase the fines for violation of the cease and desist law.

Proposed changes to the Real Property Law include: increasing the level of penalties from $1,000 to $10,000 per violation; publication of an annual list of broker fines, license suspensions and revocations and rewording some of the law’s language to make it more consumer-friendly.

Two Nassau County legislators have proposed an amendment to the law that would apply the cease and desist rule to all homeowners in a cease and desist zone. Only those homeowners who would welcome solicitation from brokers would have to register.

Similar legislation has been declared unconstitutional in the past.

Welcome to the discussion.