Managing Agents Agreements.
28 RCNY § 3-16
in effect§ 3-16 Managing Agents Agreements.
(a) Managing agents agreement required. All housing companies are required to enter into written agreements for management services which must be approved in writing by HPD. This subdivision (a) applies to all agents, corporate or individual. Managing agent agreements are subject to the provisions of subdivision (e) of 28 RCNY § 3-13 regarding debarment.
(b) Criteria for selection of managing agent.
(1) The prospective agent, corporate or individual, must be a real estate broker in good standing duly licensed by the State of New York. Site managers employed by the prospective agent must be certified, by an organization acceptable to HPD, within twelve (12) months after assignment to an HPD-supervised housing development. The certification requirement cannot be waived by transferring the site manager to an alternate HPD-supervised site prior to the end of the twelve month period. If a housing company elects to undertake self-management of its housing development, it must seek written approval from HPD. The person being employed to perform the role of manager must be approved in writing by HPD. If the manager is an employee of the housing company, he or she is not obligated to have a real estate broker's license. However, the employee-manager must be certified, by an organization acceptable to HPD, within twelve (12) months after his or her initial employment date.
(2) The agent must provide a fidelity bond in an amount and form and with a surety approved by HPD.
(3) The agent shall provide evidence of experience and capability commensurate with the responsibility it seeks to undertake.
(4) The agent may be required to submit a management plan proposing a program conducive to proper maintenance and economic viability of the project, and to harmonious relations among tenant / cooperators, management and the community. The plan shall include, but shall not be limited to, policy regarding deployment of personnel, tenant / cooperator-management relations, tenant / cooperator selection, rent/carrying charge collection procedures, agency reporting procedures, fiscal accountability, physical plant maintenance, equal opportunity measures and security measures. The plan shall take into account the characteristics of the development, its neighborhood and type of tenancy (e.g., senior citizen or handicapped). The plan and its implementation will be considered in determining the agent's employment, renewal and compensation, and will be subject to HPD review and written approval.
(5) The agent must maintain an office or place of business in the metropolitan area at no cost to the housing company where it will keep all books, records, bills and other documents pertaining to the housing company. These records will be available for inspection and review by the owner, HPD or other interested parties as permitted by statute or rules of HPD.
(c) Term of managing agent's agreement.
(1) Any managing agent's agreement shall be in a form approved by HPD and shall be of no force or effect until the contract has been approved in writing by HPD.
(2) All new managing agent's agreements shall have a term of one (1) year commencing July 1st and terminating on June 30th of the following year. All renewals shall have a similar one (1) year term; provided, however that if a new managing agent agreement commences after July 1st, it still shall terminate on the June 30th following the commencement of such agreement.
(3) Managing agent agreement renewals must be submitted to HPD for written approval.
(4) Any managing agent's agreement shall provide that it is subject to termination without cause upon thirty (30) days written notice by the housing company or HPD. HPD or the housing company shall have the right to immediately terminate any managing agent for cause.
(5) Promptly upon any termination, the managing agent shall turn over to the housing company, all project records, rent rolls, bills, cancelled checks, bank statements, bank books, waiting lists, correspondence, ledgers and all other documents related to or owned by the housing company.
(6) HPD may review the performance of a managing agent at any time and may solicit comments from owners, tenants, and others relating to the performance of the managing agent.
(7) Notwithstanding anything to the contrary contained in this section, HPD is authorized to require the replacement of any employee of the managing agent whose job duties are performed on the premises of the rental or mutual housing company development and who has violated the Private Housing Finance Law and/or applicable rules and directives governing such housing developments.
(d) Managing agent's fee.
(1) The managing agent's fee will be negotiated by the housing company and will be subject to approval by HPD.
(2) The fee may be further adjusted on a compound basis by a percentage to be established annually by HPD, said percentage may be subject to negotiation by the housing company, but may not exceed the maximum percentage authorized by HPD.
(3) If a new managing agent enters into an agreement with a housing company to replace an existing agent at a development, the maximum fee which can be paid to the new agent will be the fee established for the prior agent, plus any cumulative percentages adjustments which have been approved by HPD, regardless of whether the prior agent was given said increases. The new agreement is subject to negotiation by the housing company within the maximum established above.
(4) If, upon evaluation by HPD, it is determined that an agent's performance has not been satisfactory during the prior year, the agent shall not be entitled to the annual increase in its fee. In its evaluation, HPD will consider comments from the housing company and the Tenants Association but will make the final determination regarding the increase. HPD will advise the housing company in writing at least 30 days prior to the agreement renewal date each year if approval of the annual increase is being withheld and the reasons therefor.
(5) An approved annual increase in the managing agent's fee will become effective on July 1st of each year.
(6) In the event a newly constructed development goes into occupancy, the managing agent's fee shall be negotiated by the housing company, but in no event shall it exceed the highest fee plus cumulative increases for a development of comparable size and nature already in existence within the program. Comparability will be determined solely by HPD.
(7) If HPD disapproves an annual increase for a managing agent, HPD may within a reasonable period of time meet with the representatives of the housing company and the managing agent to discuss the reasons for HPD's dissatisfaction. The managing agent shall take such steps as deemed necessary by HPD to satisfy HPD requirements. If the agent's performance remains unsatisfactory, HPD may, upon notice to the housing company, terminate the managing agent's agreement.
(e) Duties and responsibilities of managing agent. The principals of the managing agent shall devote a reasonable percentage of their time in supervising management duties of their subordinate staff. Said management duties shall include, but shall not be limited to, the following:
(1) investigate, hire, pay, supervise and discharge all personnel necessary to be employed in order to properly maintain and operate the development in accordance with an operating schedule, job standards and reasonable and necessary wage rates approved by the housing company. Such personnel shall be considered employees of the housing company and compensation for the services of such employees shall be considered an operating expense of the company, provided, however, that in each development the managing agent shall employ and shall compensate out of its fee one or more responsible individuals as approved by HPD and the housing company whose job it shall be to carry out the responsibilities of the managing agent at the premises;
(2) prepare tax records, including withholding and social security records for the employees of the development, and shall administer required programs of workers' compensation and other employee liability insurance programs;
(3) collect all monthly rents, carrying charges and all other charges due from tenant / cooperators both residential and commercial, and from other users or concessionaires; including, but not limited to, licensees, and take such action with respect thereto as the owner may authorize;
(4) cause the buildings and grounds of the development, and all equipment appurtenant thereto to be maintained according to standards acceptable to the housing company and to HPD;
(5) subject to the approval of the owner and in accordance with HPD rules, contract for water, electricity, gas, fuel oil, extermination and other necessary services;
(6) in accordance with HPD’s directives for managing agents, submit tenant / cooperator applications to HPD for approval; maintain waiting lists in accordance with HPD rules and utilize such lists in the re-rental of vacated apartments or resale of shares in a mutual housing company; perform all services in connection with the processing of applications resulting from such reletting or resale;
(7) diligently undertake the renting of any parking spaces, commercial and non-dwelling space in the project, arranging for the execution of such leases or permits as may be required;
(8) undertake recertification of tenant / cooperator income as required by HPD or by federal regulations;
(9) prepare and submit annual operating budgets, monthly operating reports, rent rolls, vacancy reports, rent arrears reports, surcharge tabulation sheets, equal opportunity reports, HUD excess income reports, where applicable, and any other documents required by the housing company or HPD;
(10) maintain books and records relating to the development;
(11) establish operating bank accounts and make deposits and withdrawals in such account as directed by the housing company; maintain a blocked reserve account as required by HPD and invest the funds of such account in accordance with HPD rules to attain the maximum return on investment;
(12) advise the housing company and HPD of projected needs for repairs and replacements at least once each year; review physical inspection reports and effect compliance;
(13) submit contracts and retainers for HPD approval in accordance with HPD rules;
(14) process tax matters in a timely manner;
(15) conduct an annual inspection of all apartments for the purpose of identifying unreported electrical or other equipment (air conditioners, freezers, washing machines and dryers), observing the physical condition of the apartments, and ascertaining compliance with the rules and regulations of the project, HPD and HUD, where applicable, and report its findings in writing to the Owner and HPD;
(16) receive, record and respond to all service requests made by tenants in a timely manner;
(17) carry out such other duties and responsibilities as may be stipulated by the housing company or HPD and as may be included in the management agreement; and
(18) advise HPD of violations of these rules attempted or carried out on behalf of the housing company, its employees, any person or entity or employee of an entity doing or seeking to do business with the housing company or by members of the Board of Directors of the housing company.
(f) Allocation of management expenses. In order to establish a uniform allocation of management expenses between the managing agent and the housing company, the below listed charges are allocated as follows:
Charge to
Managing Agent Housing Company
(1) Item of expense
(i) Wages for managing agent's staff
(A) On site X
(B) Central office X
(ii) Sight staff, where applicable Case by Case Basis
(iii) Messenger service and out of pocket expenses for deliveries X
(iv) Travel expense from central office to site and back X
(v) Travel expense to and from HPD for such things as meetings X
(vi) Overtime for emergencies or deadlines X
(vii) Legal and accounting fees of managing agent X
(viii) Rent hearing participation X
(ix) Cost of preparing all reports required by HPD, HUD, where applicable, or any other city, state, or federal agency X
(2) On site furnishings
(i) Office furniture (desk, chair, carpet) X
(ii) Office equipment, purchased or rented (computers, facsimile machine, mimeo, xerox, typewriters, adding machines) X
(iii) Maintenance and repair of equipment X
(3) On site supplies and services
(i) Housing company stationery, plain and copy paper X
(ii) Pens, pencils, clips, carbon paper and other office supplies X
(iii) Postage X
(iv) Telephone X
(A) On site X
(B) Central office X
(v) Printing of leases, notices and advisories to tenant / cooperators; and forms for Board elections X
(vi) Photocopying and other reproduction costs X
(vii) Fidelity Bond and other insurance covering management operation X
(viii) Penalties or fines levied by Finance Department or other agencies Case by Case Basic depending on fault
(ix) Lock box service X
(g) Leasing of commercial space, commissions. In the leasing of commercial space, payment of real estate brokerage commission shall be solely in accordance with the following rules:
(1) No brokerage commissions shall be permitted for that part of a lease term in excess of 20 years.
(2) No brokerage commissions shall be permitted for:
(i) tax payments deemed to be additional rent and paid by the tenant,
(ii) options to renew for an additional term of years, unless such option shall have been duly exercised in accordance with the terms of the lease or
(iii) payments for items not included in basic rent, including, but not limited to, utilities and costs of improvements made by the owner.
(3) Maximum brokerage commissions shall be permitted in accordance with the following schedule, based on the rentals charged the tenant:
First year or any fraction thereof 5 1/2%
Second year or any fraction thereof 2 1/2%
Third year up to and including the tenth year 2 1/2%
Eleventh year up to and including the twentieth year 1 1/2%
(4) Brokerage commissions earned and due the broker, shall be paid by the housing company in an amount not to exceed the dollar amount of the non-refundable security held by the housing company at the time the lease is approved by HPD. The balance due, if any, shall be paid when the tenant takes possession of the premises in accordance with the terms of the lease.
(5) Brokerage commissions earned and due the broker, where the tenant is a bank, supermarket chain or where the tenant's latest published credit rating is "A" or better and no security deposit is required under the lease, shall be paid by the housing company when the lease is approved by HPD.
(6) When requested by HPD, the broker shall submit trade references, financial statements and any other credit information which shall be properly authenticated in order to determine the credit-worthiness of the tenant.
(7) The brokerage agreement shall constitute the complete understanding between the housing company and the broker. There shall be no payments to the broker beyond those authorized by such agreement.
(Amended City Record 8/14/2019, eff. 9/13/2019; amended City Record 6/20/2023, eff. 7/20/2023)
Source: City of New York, Charter, Administrative Code and Rules (American Legal Publishing XML export, codelibrary.amlegal.com)URL: https://codelibrary.amlegal.com/codes/newyorkcity/latest/NYCrules/0-0-0-54191Fetched: 10/24/2026