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N.Y. Buyer Files Class-Action Lawsuit Over Dual Agency

July 23, 2018

A home buyer in White Plains, N.Y., has filed a class-action lawsuit against real estate brokerage Houlihan Lawrence, accusing the firm of using dual agency as a tactic to maximize its profits and dominate the local market. Dual agency is when both the buyer and seller of a transaction are represented by the same brokerage. Pamela Goldstein, the buyer who filed the suit, is seeking a class-action status to represent consumers who may have faced a similar experience.

In the lawsuit, filed with the New York Supreme Court, Goldstein says that when she purchased a four-bedroom home last year, she was not informed that both her agent and the listing agent worked for Houlihan Lawrence—and that her agent reported to the listing agent in the firm's chain of command. Goldstein claims she paid $35,000 more than the listing price because her agent said there was a bidding war for the home.

Goldstein's attorney, William Ohlemeyer, accuses Houlihan Lawrence of depriving “thousands of New Yorkers of their right to have an agent be loyal to them—and only to them—by representing buyers and sellers on opposite sides of the negotiating table without both parties’ informed written consent.”

Houlihan Lawrence issued a written statement in response: “A former client has filed a lawsuit against our company, and we deny allegations in the complaint. Houlihan Lawrence has been dutifully serving our clients for 130 years and is confident in our business practices. We will continue to represent our buyer and seller clients with integrity.”

The practice of dual agency has attracted scrutiny in recent years. New York State has issued a legal memorandum, “Be wary of dual agency,” to alert consumers about the practice. And in June, the Real Estate Council of British Columbia banned the practice and will only permit double ending deals in certain circumstances.

Houlihan Lawrence Sued for ‘Dual Agency’ Practice,” Rockland/Westchester Journal News (July 19, 2018)