The New York City Council has passed a local law that will force landlords who hire real estate brokers to rent their apartments to pay the associated fee, instead of having the tenant pay.
The law, which goes into effect in the summer of 2025, is called the FARE Act – Fairness in Apartment Rentals. It seeks to eliminate the typical 10 to 15% fee that tenants typically pay the landlord’s broker when they sign a lease.
“I believe that this bill will give tenants bargaining power,” said City Council member Chi Ossé of Brooklyn, who sponsored the legislation. “It will give them more mobility to move from one apartment to another.”
The law passed through the Council with aa big enough majority that even if the mayor vetoes the bill, the Council has the votes to override him.
The law makes it illegal for a landlord’s broker, or a broker who lists an apartment for rent, from collecting a fee from the renter. But apartment hunters who hire their own broker are still on the hook for the associated fees. A broker who violates the new law could be fined anywhere from $500 to $2,000 and could be sued in court for damages.
While landlords would be prohibited from baking the fee into the rent, it is not clear how the city plans to stop property owners from increasing rents to cover the added cost of brokers’ commissions.
Many real estate professionals, and some city council members, argued that the new law will not work as intended. They fear that the law will cause higher rents and fewer rental listings.
You can read more about the new law on the city council’s website, council.nyc.gov. Search for file # Int 0360-2024. If you’re reading this article online, this link will take you there.
Roger A. Levy is a founding member of Levy & Nau P.C., where he practices law in the fields of real property, estates, wills, trusts and related litigation. When not flying a desk, Roger flies a twin-engine Cessna 337 Skymaster. He also holds the rank of Major in Civil Air Patrol, the official Auxiliary of the US Air Force, and commands CAP’s New York City Group.
The law, which goes into effect in the summer of 2025, is called the FARE Act – Fairness in Apartment Rentals. It seeks to eliminate the typical 10 to 15% fee that tenants typically pay the landlord’s broker when they sign a lease.
“I believe that this bill will give tenants bargaining power,” said City Council member Chi Ossé of Brooklyn, who sponsored the legislation. “It will give them more mobility to move from one apartment to another.”
The law passed through the Council with aa big enough majority that even if the mayor vetoes the bill, the Council has the votes to override him.
The law makes it illegal for a landlord’s broker, or a broker who lists an apartment for rent, from collecting a fee from the renter. But apartment hunters who hire their own broker are still on the hook for the associated fees. A broker who violates the new law could be fined anywhere from $500 to $2,000 and could be sued in court for damages.
While landlords would be prohibited from baking the fee into the rent, it is not clear how the city plans to stop property owners from increasing rents to cover the added cost of brokers’ commissions.
Many real estate professionals, and some city council members, argued that the new law will not work as intended. They fear that the law will cause higher rents and fewer rental listings.
You can read more about the new law on the city council’s website, council.nyc.gov. Search for file # Int 0360-2024. If you’re reading this article online, this link will take you there.
Roger A. Levy is a founding member of Levy & Nau P.C., where he practices law in the fields of real property, estates, wills, trusts and related litigation. When not flying a desk, Roger flies a twin-engine Cessna 337 Skymaster. He also holds the rank of Major in Civil Air Patrol, the official Auxiliary of the US Air Force, and commands CAP’s New York City Group.
