Gov. Healey, state reps introduce proposals to ban broker fees: What to know

Yahoo

03-04-2025

If you've moved recently, you may know the pain of having to pay a broker fee on top of all your other moving costs.
In Massachusetts, a broker fee is typically about a month's rent that renters are required to pay before moving in. For a one-bedroom apartment in Massachusetts at the median rent of $2,500, broker's fees in addition to other move in costs means a renter is expected to pay nearly $10,000 up front.
But Gov. Maura Healey and some members of the legislature want to end this practice. Both Healey and state Rep. Tackey Chan, D-Quincy, have filed proposals to end broker fees.
A broker fee is a sum of money that brokers charge tenants for their assistance finding an apartment.
They are an upfront, one-time payment that can be as high as 15% of the annual rent. In Massachusetts, they are usually about one month's rent.
Brokers used to connect tenants to landlords by listing units in publications, answering questions and setting up tours. But in the age of Zillow, in most cases, brokers no longer play as large of a role in the apartment search.
Supporters of broker fees say that the fees make sure that brokers are fairly compensated. If the cost is shifted onto the landlords, they say that rents may increase.
However, opponents say that the fees add an undue financial burden onto renters, especially if the renters are doing most of the work to find the apartment themselves.
In late January, Healey included a proposal in an outside section of her annual budget plan to eliminate renter-paid broker fees.
'Broker fees are an unfair cost for renters, and they should not be on the hook to pay for someone they didn't hire,' said Healey in a statement. 'We're proud to be proposing this change that will save renters thousands of dollars – making it possible for more young people, seniors and families to stay in Massachusetts, help businesses attract the best talent, and put more money back in people's pockets for groceries, health care, and other needs.'
Her proposal would require that the fee be paid by whichever party hires the broker, which is usually the landlord.
State representative Chan also filed a bill in the legislature that would do the same. It uses the same language as Healey's proposal.
'Any fee shall only be paid by the party, lessor or tenant who originally engaged and entered into a contract with the licensed broker or salesperson,' reads Bill H.335 and the governor's proposal.
Healey's proposal would have to be approved by the state legislature to go though, as would the bill.
If Massachusetts bans broker fees, they would be following the example of places like New York City.
New York passed a law last December to make landlords responsible for broker fees. It's set to take effect in June.
Many other major U.S. cities don't have tenant paid broker fees.
This article originally appeared on Standard-Times: Will Massachusetts ban broker fees this year? What to know