On December 12, the governor of New York signed into law the Prohibition of Unfair Real Estate Services Agreements Act aiming to protect consumers from “unfair” residential real estate service agreements. Under the statute, an “unfair” real estate service agreement is unenforceable in New York, and entering into such an agreement would constitute a deceptive act or practice. The bill aims to protect consumers from fraud and abuse by barring contracts that are not to be performed within two years and that either bind future owners, allow assignment without owner consent, or create unauthorized liens or encumbrances, among other restrictions. The act also prohibits the recording of such agreements.

The statute grants enforcement authority to the attorney general and local government officials, who may impose injunctions and order restitution. Additionally, the statute allows for private right of action against individuals injured by a violation of the act and empowers courts to award up to three times actual damages for willful or knowing violations, plus reasonable attorneys’ fees, to prevailing plaintiffs. The law goes into effect 19 days after enactment.