Court Opinion

ID: 6191711
Source: CourtListenerOpinion
Date Created: 2022-02-05 20:08:10.783199+00
Date Added: 2024-06-11T08:56:00.564841
License: Public Domain

Vincent A. Ltjpiano, J.
Plaintiff moves for summary judgment in this action for declaratory judgment. Defendant cross-moves for judgment declaring rights and relations in his favor or, in the alternative, for an order of preclusion.
At the request of the owner, plaintiff, a real estate broker, listed and sold a condominium unit. The owner was represented by the defendant. Contract of sale was executed April 15, 1969 providing for payment of commissions to plaintiff. Closing *292occurred on May 28,1969. Payment of commissions was refused at that time. Defendant received an amount equivalent to the commissions as provided to be held by him in an interest-bearing account. Plaintiff did not consent to that arrangement.
Plaintiff urges that a novel question of law is alone involved. That question is whether a licensed real estate broker must be a licensed securities dealer to earn and receive a broker’s commission on the resale of a condominium unit. Defendant contends that a condominium unit is a security interest, and the right to earn and receive a commission rests on the possession of a security dealer’s license.
Section 339-g of article 9-B, Condominium Act, of the Real Property Law provides: “ Status of units. Each unit, together with its common interest, shall for all purposes constitute real property. ” Defendant argues, however, that section 352-e of the General Business Law applies. It is contained in article 23-A which regulates fraudulent practices in respect of stocks, bonds and other securities. Section 352-e pertains specifically to real estate syndication offerings. The various sections and subdivisions following 352-e clearly indicate the legislative intent to regulate thereby the original organization and public offering. Violation may result in prosecution by the Attorney-General or in civil suit by investors against those only responsible for misleading prospectus (Steingart v. 21 Assoc., 31 Misc 2d 212). In addition, section 339-ee of the Real Property Law pertaining to “ effect of other laws ”, provides, in part, in subdivision 1 thereof: All units of a property which shall be submitted to the provisions of this article shall be deemed to be cooperative interests in realty within the meaning of section three hundred fifty-two-e of the general business law. Article nin'e-a of the real property law shall not apply to the property or any unit. ’ ’ Article 9-A pertains to the subdividing of lands pursuant to original plan. The resale of an interest in real property is unrelated to an original sale in a syndication constituting a sale of securities. In the latter situation a securities license is required. On the resale of a unit previously acquired by syndication, the supervisory purposes have been exhausted and possession of a broker’s license suffices.
Plaintiff’s motion is granted, and defendant’s cross motion is denied. Settle order.