New York City Ends Tenant-Paid Broker Fees
New law shifts the cost to landlords
The New York City Council has passed a groundbreaking bill requiring landlords—not tenants—to pay broker fees when they hire a broker to list a rental. This change addresses a long-standing frustration in New York City’s competitive rental market of tenants paying steep broker fees, often as high as 15% of the annual rent, even when they had no say in hiring the broker.
For decades, New York City was one of the few places in the United States where tenants usually paid for brokers hired by landlords. The new legislation, known as the FARE (Fairness in Apartment Rentals) Act, flips that arrangement. Introduced by Council Member Chi Ossé in 2023, the new bill mandates that whoever hires the broker must cover their fee. Landlords will now be responsible for paying the brokers they engage to list their properties.
The bill also requires brokers and landlords to disclose all fees to tenants upfront. While this may seem like a simple fix, it faced years of pushback from the real estate industry, which argued that shifting the financial burden could disrupt the market.
Critics of the new law, including some brokers, warn that landlords may raise rents to offset the additional cost which potentially leaves tenants no better off. On the other hand, supporters believe it brings much needed transparency and fairness to the rental process while relieving tenants from thousands of dollars in upfront fees.
Time will tell how this change impacts the city’s housing market, but one thing is clear – the days of tenants footing the bill for a broker they didn’t hire are officially over.