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By Donna Lamb

  
 

Renters Beware: Online Real Estate Ads Riddled with Hidden Brokers’ Fees

By Donna Lamb

According to a new report released by the City Council’s Subcommittee on Oversight and Investigations, chaired by Eric Gioia, nearly one third of online real estate advertisements use deceptive – even illegal – practices. These findings were the result of the Council’s investigation of 223 real estate agents who advertised "no fee" apartments on craigslist.org and backpage.com, two popular online listing services. Investigators uncovered that while 64% of agents were truthful in their advertising, 31% of the no fee apartments did, in fact, have broker fees. These deceptive ads result in thousands of dollars in hidden charges for renters.

To protect consumers, Council Member Gioia joined with other councilmembers and Internet leaders to urge the Department of Consumer Affairs (DCA) to crack down on fraudulent online advertising by implementing the following common sense enforcement and public awareness efforts:
  • Monitor the online advertising of the City’s real estate agents. Under current law, DCA can monitor the advertising of all businesses promoting themselves to City residents; however, DCA has not been monitoring advertising by real estate agents. The Council recommends that DCA actively monitor web advertising by real estate agents and act upon complaints regarding potentially fraudulent behavior.
  • Work with apartment listing websites such as craigslist.org and backpage.com to educate consumers about deceptive practices since these websites have the unique ability to reach consumers quickly and directly.
  • Share information with the NYS Department of State (DOS) about agents who advertise fraudulently. The DOS licenses real estate agents and has the power to revoke a license for fraudulent behavior.
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    Councilmembers also called for an increase in the fines for unfair trade practices; for real estate agents to self-police; and for the New York State Board of Real Estate to include consumer advocates among its appointed members.

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    As Gioia pointed out, from renting apartments to buying dinner and watching movies, New Yorkers are turning to the Internet more and more to improve their daily lives. "Yet as our habits change, government must be nimble enough to prevent fraud and protect consumers in new, creative ways," he stated. "That's why we're encouraging DCA to implement these simple recommendations that could help protect New Yorkers from fraud and save them money."

    Council Member Leroy Comrie, Chair of the Council’s Consumer Affairs Committee, said, "These fraudulent practices by apartment brokers is a blight on an industry that continues to fail to adequately police itself and requires continuous oversight by the City. False advertising, block busting, racial steering and predatory lending are real estate issues that my committee fully intends to investigate in the near future."

    "Fraudulent advertising in the real estate market also presents a distinct obstacle to a consumer's ability to purchase a home," added David Weprin, Chair of the Council’s Finance Committee. "Brokers who engage in false claims against the public should be severely admonished for their blatantly deceptive tactics."

    Read more of Donna's articles at http://www.donnalamb.com/

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