NYC landlords will now have to pay broker fees over renters
Here’s a win for New York City renters: the City Council just approved a bill that will shift the burden of paying broker fees onto landlords over tenants in most cases.
Specifically, under the Fairness in Apartment Rental Expenses (F.A.R.E.) Act, whoever hires the broker will now have to pay for it.
The news has been a long time coming: in 2020, New York State issued a mandate that made landlords responsible for the cost—but the Real Estate Board of New York eventually sued and a state court then officially overturned the mandate.
Since the legislation passed with a vote of 42 to 8, the new guidelines are veto-proof. As a result, Mayor Eric Adams’ option to sign the act into law within 30 days is no longer relevant. Regardless, the legislation will go into effect in 180 days.
According to a 2023 report by StreetEasy, the average New Yorker spends over $10,000 in upfront costs for rentals—the largest of which “is often the broker fee.” The data imbues the new guidelines with a sense of resonance that council member Chi Ossé, who first introduced the legislation, has been vocal about for some time.
“What other industry exists where someone else orders something and then [you] have to pay for it,” he said back in May. “Why are we so conditioned to think that this is okay?”
But the act has its fare share of critics as well, starting with the New York State Association of Realtors. The group specifically argues that the changes will threaten “brokers livelihoods, lead to increased rents and limit housing access.”
During a separate press conference earlier this week discussing the impacts of the 2024 Presidential election on New York City, the Mayor seemed to also be uneasy with the F.A.R.E. Act as it stands, suggesting it could turn broker fees into “a permanent fee that’s built into your rent.”
“[We have to] make sure that we reach the goals that we’re looking for and, at the same time, don’t hurt small property owners and try to give some relief to those who are trying to live in the city,” he said. “I think the bill has the right intention but, sometimes, good intentions do not get the results you’re looking for.”
For what it’s worth, us New York renters are rejoicing at the bit of financial respite that the new plan may offer us. Let us rest easy for a bit.