The courts in NYS, under certain circumstances, are required to appoint a fiduciary (guardian, receiver, executor, etc.) to handle the sale of real estate. The individual or attorney is required under Part 36 of the NYS Court system to follow constraints and procedural rules that govern the selection of real estate professionals for approval. However, no New York State law universally requires a lawyer to use a “Part 36” real estate broker/agent (or any particular broker) in every case involving indigent individuals, nursing home residents, or decedents’ estates. It generally occurs when a court is appointed and gets involved in handling the process. · What is “Part 36” in NY: · Part 36 of the Rules of the Chief Judge governs “Appointments by the Court”(e.g. guardians, receivers, counsel, appraisers, property managers, real estate brokers) when a court is involved in appointing someone to manage or dispose of property cjc.ny.gov+5Justia+5nys-fjc.ca2.uscourts.gov+5 ·
When a fiduciary is appointed under Part 36, the fiduciary (or the court) must comply with certain rules about retention of professionals (e.g. attorneys, real estate brokers) and oversight. Justia+3New York Courts+3nys-fjc.ca2.uscourts.gov+3 · The explanatory note to Part 36 indicates that Part 36 generally applies to appointments compensated by private parties—and may not apply in the same way to appointments compensated from public funds. nys-fjc.ca2.uscourts.gov+1
Thus, in scenarios where the court is supervising the sale of property through a court-appointed fiduciary, the lawyer or fiduciary may be constrained by Part 36 rules in selecting and approving a real estate broker. It means that a Broker must be chosen from the Part 36 database of Brokers. What Part 36 Requires (in applicable cases) When a Part 36 fiduciary (e.g., a guardian, receiver, or executor under court supervision) seeks to retain a real estate broker (or other professional), that broker is considered a “Part 36 appointee” and is subject to the rules in Part 36. cjc.ny.gov+3New York Courts+3nys-fjc.ca2.uscourts.gov+3 Some relevant constraints include: · The court must evaluate the qualifications of candidates for such appointments. cjc.ny.gov+2nys-fjc.ca2.uscourts.gov+2 · There are rules about disqualification, compensation, reporting, and oversight of appointees under Part 36. New York Courts+3nys-fjc.ca2.uscourts.gov+3Justia+3 ·
The rules aim to guard against abuses — e.g. “lucrative designations of secondary appointments” — by requiring judicial oversight and limits. cjc.ny.gov+1 · In short: in court-supervised matters, a lawyer (or fiduciary) cannot simply pick any real estate broker; they must adhere to the procedural rules set out in Part 36 (if it applies). But that is not the same as a general obligation that in all real estate transactions involving indigent persons or nursing home residents, a lawyer must use a Part 36 broker. Situations where Part 36 likely does not mandate use of a broker. If a private individual (or private attorney) handles the sale of a real property not under court supervision or without a Part 36 appointment, those Part 36 provisions typically wouldn’t apply. If the lawyer is not acting as a court-appointed fiduciary but as counsel for a private party, the lawyer’s professional obligations would derive from general real estate law, fiduciary duties, and ethics rather than Part 36. Part 36 does not always apply when fiduciaries are compensated from public funds, or in certain categories of appointment. nys-fjc.ca2.uscourts.gov+2Justia+2
Indigent, nursing home, deceased persons) · Indigent & nursing home individuals: Being indigent or being in a nursing home does not, by itself, trigger Part 36. Only when the court appoints someone (guardian, receiver, etc.) to manage or dispose of property under judicial supervision (and where Part 36 is applicable) would the Part 36 rules about retention of real estate brokers come into play. ·
Deceased persons: For an estate, if the executor or administrator is handling real property, absent court supervision or a Part 36 appointment, the executor’s duty is to manage the estate under the Surrogate’s Court laws and fiduciary obligations, not under Part 36. If the court appoints a receiver or sells property under supervision, then Part 36 might apply to the selection of professionals. So the bottom line is: there is no sweeping statutory requirement in New York that a lawyer must use a “Part 36 broker” in all such circumstances.
But yes, in specific court-appointed fiduciary contexts under Part 36, the selection of real estate brokers is governed by Part 36 rules. This is a somewhat complicated issue and can cause stress, worries, and misunderstandings if you lack knowledge or are not well-versed. Since I am not an attorney and cannot offer legal advice, I suggest speaking with yours. Most importantly, it is those individuals who have no will, trust, or even the newly approved (Dec. 2024)
A Transfer on Death (TOD) deed that allows real estate to be transferred to the heirs without going through the Probate process. These documents are critically important. Some 65% of those who owned real estate in 2024 didn’t have a Will. So a word to the wise, get off your butt and do something today. If you need any non-legal advice or if you do not have an attorney, feel free to call me anytime for a referral.
Philip A. Raices is the owner/Broker of Turn Key Real Estate. He has 43+ years experience in the Real Estate industry and has earned 3 significant designations:
Graduate-Realtor-Institute designation.jpg (What I consider a Master’s degree in real estate)
CIPS designationlog.pngexpert in consulting and completing international transactions.
Green designation.pngeco-friendly low carbon footprint construction with 3-D printed foundations, Solar panels, Geo-thermal HVAC/Heat Pumps).
He will also provide a copy of “Unlocking the Secrets of Real Estate’s New Market Reality, and his Seller’s and Buyer’s Guides for “Things to Consider when Selling, investing or Purchasing your Home.
He will provide you with “free” regular updates of what has gone under contract (pending), been sold (closed) and those homes that have been withdrawn/released or expired (W/R) and all new listings of homes, HOA, Townhomes, Condos, and Coops in your town or go to: https://WWW.Li-RealEstate.Com and you can “do it yourself (DYI) and search at your leisure on your own.
However, for a “FREE” no obligation/no strings attached 15-minute consultation, as well as a “FREE printout or digital value analysis of what your home might sell for in today’s market without any obligation or “strings” attached call him at (516) 647-4289 or
email: Phil@TurnKeyRealEstate.com You can now search at your leisure for properties at: WWW.Li-RealEstate.com
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