With a quick scroll through rental advertisements on craigslist.org, you'll notice a number of attractive "NO FEE" alerts, decorated with asterisks and exclamation points for maximum visibility.
But those promising postings aren't always for real, a City Council report released yesterday warned. In fact, about a third of brokers who list no-fee properties are probably lying, the Committee on Oversight and Investigations found.
To better control the online real estate market, the committee recommended that the city Department of Consumer Affairs, which regulates advertising, monitor Internet listings and check into complaints sent to Web site administrators.
It also suggested that the department increase its fines for violations, which range from $50 to $500, and that it relay any findings to the state Department of State, which can revoke an agent's license.
In September, the committee called 223 real estate agents who had advertised no-fee apartments on craigslist.org and backpage.com, two popular Web sites that list classified ads. When asked if they charged a broker's fee, 31 percent said they did, despite their ad.
Another 4 percent said the cost was actually noted on the posting, in miniature print at the bottom. Of those with fees, 87 percent charged one month's rent or 10 to 15 percent of the annual rent.
"These ads are costing New Yorkers thousands of dollars," Councilman Eric Gioia (D-Woodside), chair of the committee, said at a news conference Thursday.
"The truth is that you can't put an ad in a newspaper that's dishonest and we've gotten pretty good at protecting against that."
"We look forward to working with the Council to both strengthen those protections and expand our efforts to educate consumers," Dina Improta Roskins, a Consumer Affairs spokeswoman, said.
About 3,000 New York rental ads are posted on backpage.com every month, said Carl Ferrer, the site's founder. He and Craig Newmark, who founded craigslist.org, have both tried in recent years to supervise the no-fee promises themselves and supported the City Council's suggestions.
Newmark said he has gone so far as to kick repeat offenders off the site.
"We rely currently on the community and other brokers to report the bad apples," Ferrer said. His site receives 20 to 30 complaints a month about deceitful agents. "That's not too bad, but we tend to think that's people accepting the reality."
Robert Eichner, president of the Manhattan Realtors Association, said he was shocked by the amount of fraud the committee found.
"The magnitude is out of control," Eichner said, adding that most probably use the old "bait and switch," luring customers with a deal that's too good to be true.
He was skeptical of the consumer department's power to control the problem. "The spirit is good, but do they have the resources and the staff for such an undertaking? I don't know." |
