New Allegations Filed Against Local Real Estate Giant Houlihan Lawrence

The suit has the potential to affect not just the region’s largest real estate firm, but possibly thousands of area residents.

Update 12/6/18: For even more details on this far-reaching suit, click here.

Update 10/2/18: Counsel for the plaintiffs, William S. Ohlemeyer and Jeremy Vest of Boies Schiller Flexner LLP, have filed an amended complaint with some key new features:

• Two anonymous letters, one from someone claiming to be a former Houlihan Lawrence agent, have come to light, alleging that the real estate company’s agents have in the past received a 5-10% bonus on their commissions for keeping transactions in-house, violating the company’s fiduciary duty to its clients.

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• New homebuyers and sellers have been identified as representatives of the class action suit. Some sellers allege that Houlihan Lawrence never advertised their property to outside parties, while one buyer says he was “strongly discouraged and ultimately dissuaded” from using his preferred attorney in his transaction. 

Westchester Magazine will keep you updated on this potentially far-reaching lawsuit as it progresses. Original details of the case follow.

A lawsuit has been filed in the Supreme Court of Westchester against Houlihan Lawrence, a Berkshire Hathaway affiliate and the area’s largest real estate firm, focusing on what it claims is the firm’s inordinate and inappropriate usage of “dual agency” transactions.

The suit alleges that the company, by way of its team at Gino Bello Homes, failed to properly disclose to homebuyer Pamela Goldstein — and potentially many others — that the same agency and team representing her were also representing the seller. This and how the company obfuscated the fact, the suit claims, violated Goldstein’s trust and the firm’s fiduciary duty to work in her best interests, as well as both New York State General Business and Real Estate Property Law.

The suit further alleges that Houlihan Lawrence actively incentivizes agents to engage in dual agency transactions, in deference to New York State Association of Realtors recommendations, utilizing the approach to earn a double-commission on nine of the company’s ten most lucrative home sales of 2017, to the tune of some $3 million in profits.

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“This suit seeks to ensure that, going forward, no homebuyer or seller in the tri-county area enters into a dual-agent transaction without fully understanding that they are giving up their right to be represented by an agent who is loyal to them—and only to them—throughout the entire transaction,” said William Ohlemeyer, partner with law firm Boies Schiller Flexner LLP, and lead attorney on the filing.

Houlihan Lawrence responded in a written statement saying:

“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.”

Houlihan Lawrence reported close to $4 billion in Westchester sales last year, topping market shares across every price point, but is especially prevalent in wealthier areas: In 2016, Houlihan Lawrence represented at least one side in 75% of Bronxville real estate transactions.

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