Latest news with #FairnessinApartmentRentalExpenses
New York Post
20-06-2025
- Business
- New York Post
NYC's new broker fee law already being flouted by sneaky real estate agents, tenants say: ‘Exploiting a loophole'
Well this is just un-FARE. Sneaky New York City landlords have been using tricky tactics to get around a new law that bans them from charging broker fees to renters, The Post has learned. Advertisement Some prospective renters have reported being faced with thousands of dollars in 'management' or 'technology' fees — that look awfully similar to those previously charged by landlords to pay for real estate brokers. 'They're exploiting a loophole in the law,' said Todd Roulich, a tenant broker in New York, of landlords and agents. 6 Some New York renters are still shelling out thousands of dollars in fees for real estate brokers they didn't hire, The Post has learned. Paul Martinka Advertisement Others have reported being told to sign forms stating that they were the ones to hire the broker — even when that wasn't true. The so-called FARE Act — or Fairness in Apartment Rental Expenses — prohibits renters from being charged a 'broker fee' — which is typically about 15% of the annual cost of a unit. But the city Department of Consumer and Worker Protection, the agency responsible for enforcing the FARE Act, told The Post it has received nearly 300 'questions and complaints' about violations of the new law since it went into effect June 11. 6 One Zillow listing demands a security deposit, one months' rent and a 'service/broker fee.' r/NYCapartments/KittyInaPinkHoodie Advertisement 6 'I'm trying to apply for an apartment, and the broker said to apply I need to hire him as my broker to represent the application,' one Reddit user said, 'which of course includes a broker fee.' ZJL Studio – Queens native Kelly McGarry told The Post she met brokers at two different apartment showings this month — both of which used sneaky methods to try to collect a fee. McGarry, 27, reported that each one of the agents she met with tried to get her to sign paperwork saying she hired them, even though she hadn't. 'I've applied for apartments in the past before, and I've never had to verify anything … of that sort,' McGarry said. 'They knew the FARE Act was coming, and they were prepared to do what they could to get around it.' Advertisement One Zillow listing for an apartment in Bayside, Queens blatantly reads: 'For compensation as 'Service/Broker Fee', you as Renter agrees to hire Jack as Broker [sic].' 6 'With the FARE Act going into effect June 11, landlords will be prohibited from passing on the fees of real estate brokers they have retained to prospective tenants,' DCWP said in a statement. Christopher Sadowski Another listing, in Brooklyn's Prospect Lefferts Gardens, even appeared to ask for a security deposit and first months' rent as a mysterious lump sum of $5,040 — followed by $1,800 each additional month. Reports of similar underhanded schemes also abound on Reddit, with one disgruntled tenant writing: 'Some places we reach out [to] … makes us agree to 1 month payment of fees if we sign a lease with them, and they won't show without it.' 'I'm trying to apply for an apartment, and the broker said to apply I need to hire him as my broker to represent the application. which of course includes a broker fee,' another user said. Other agents appear to be even more bold, with one Reddit user posting a StreetEasy listing that outright asked for a $3,500 broker fee – despite the website's own disclaimer that 'under NYC law, you can't be charged a broker fee if you didn't hire a broker.' 6 One Reddit user posted a breakdown of fees they were charged post-FARE Act enactment, including a $3,500 broker fee due at signing. r/NYCapartments/maraxlee 'I'm pretty sure thru FARE we don't have to pay this broker fee,' the user wrote. 'The issue is we desperately need this place lol.' Advertisement The Dept. of Consumer and Worker Protection said when the law went into effect that 'landlords will be prohibited from passing on the fees of real estate brokers they have retained to prospective tenants' under the FARE Act. 'Landlords and their agents will be unable to pass their brokers' fees on to a prospective tenant after the effective date of this law, even if a lease was signed before the effective date,' the agency said in a statement. Some tenants may become even more desperate in the coming months according to The Real Deal, which reported that some landlords are already looking to raise rents to offset costs associated with hiring a broker themselves. 6 A November rally for the FARE Act, with council member Chi Osse speaking. Paul Martinka Advertisement Allia Mohamed, CEO of real estate website Openigloo, deemed that sneaky agents and landlords attempting to ignore and try to work around the law are simply a part of a 'very natural correction period' and that the matter will stabilize when bad actors are disciplined. 'What is really important is for renters to understand their rights when it comes to the FARE Act,' Mohamed said, and 'making sure that they're taking screenshots, saving links, keeping receipts, filing those complaints until we get through this correction period.' City council member Chi Osse, who introduced the legislation last year, urged New Yorkers to report agents and landlords who continue trying to charge a broker fee to tenants. Advertisement 'If you see an online listing that says a broker is working as a prospective tenants' broker, they're lying,' Osse said. 'They posted with landlords' permission, so they're working for the landlord.' To file a complaint regarding a FARE Act violation, consumers can visit or call 311.
The Star
11-06-2025
- Business
- The Star
NYC bans broker fees on tenants
NEW YORK, June 11 (Xinhua) -- The Fairness in Apartment Rental Expenses (FARE) Act went into effect on Wednesday in New York City, ending the longstanding practice that brokers marketing an apartment were paid a fee when a contract was signed and that fee had been paid by the tenant, and instead requiring the landlord to pay the marketing broker's entire fee. "Such a fee is typically between 10 percent and 15 percent of the annual rent, which means renters might need to pay thousands of additional dollars before they can move in. That is especially burdensome for young and low-income apartment seekers who don't have a lot of cash on hand," reported The Wall Street Journal about the move. New York is one of the last cities in the United States to eliminate tenant-paid brokers fees. Boston is now the only major U.S. city where tenants are still on the hook for these fees, though there are several proposals before the city government to follow New York and end the practice. "Some property managers are expected to test the market by imposing major rent increases as soon as the new law goes into effect," noted the report, adding that "a number of brokers have been listing two different prices. One for an apartment before the FARE Act went into effect, and an additional price that was often several hundred dollars more for Wednesday and thereafter."
New York Post
11-06-2025
- Business
- New York Post
How NYC renters could begin saving thousands in fees
If a new New York City rental law goes through as expected, New Yorkers can expect to pay a lot less to rent an apartment. Unless there is a last-minute reversal by a judge, the Fairness in Apartment Rental Expenses (FARE) Act is scheduled to take effect on Wednesday. The law will end the process of passing along the broker's fee to tenants. From now on, unless a tenant explicitly hires a broker to find an apartment, the landlord will have to eat this cost, which ranges from one month's rent to up to 15% of the annual cost of renting an apartment. What brokers think about the new law 'There has been a lot of talk about this issue. As a broker, I am glad that there will be no commission charge by a landlord if someone wants to lease their apartment,' Sonia I. Christian-Bendt, a broker with Berkshire Hathaway HomeServices New York Properties, tells 'I think this is a win-win move for both sides.' 4 It's forecasted that broker's fees will not longer be passed to tenants once this law goes into effect. Getty Images/iStockphoto She says the broker's fee was so onerous that even the wealthy weren't happy with it. 'In the past two rentals that an owner called me to represent, [the landlord] offered to pay the commission without even being asked,' says Christian-Bendt. 'It made it easier to lease her units—and attracted a lot of qualified renters who didn't mind paying a high rent, but who were relieved they didn't have to pay one month's rent commission or 15% of the annual rent as a broker's commission.' Nor does she think landlords will raise the rent to regain the fee. 'They have to remain competitive,' she says. But Douglas Elliman top 1% rental agent Keyan Sanai, who spoke in front of the City Council about the measure, disagrees. He asserts that tenants will end up paying more in the long run than if they'd simply paid a one-time flat fee, because landlords will not only raise rents the first year to regain the fee, but also keep it higher. 4 Even wealthy apartment owners were unhappy with the excessive broker's fee. Getty Images 'If you stay in an apartment for more than a year, then you've just paid more in rents than if you'd paid that broker's fee,' he tells Couldn't landlords raise the rent for a year until the fee is repaid, then lower the rent? 'We're talking about landlords here,' he says. Additionally, he says that while higher rents will affect all tenants, the broker's fee can be avoided, as only about half of the rentals in the city carry it. 'If you want to live on Perry Street in the West Village and have your 'Sex and the City' lifestyle, then that apartment probably has a broker's fee because the demand is higher to live in the West Village,' he says. 'But if you want to live in Hudson Yards, you probably won't have to pay a fee.' He concludes: 'The law is a short-term gain for long-term pain.' Danielle Nazinitsky, founder and CEO of Decode Real Estate, agrees the fallout won't be good for anyone. 'For landlords, there's now a new fixed expense in a declining-value market where they're already dealing with rising property taxes, wages, and insurance costs,' she tells 4 Only about half of the rentals in New York City carry broker's fees. Getty Images/iStockphoto 'For real estate agents and brokerages, this means lower margins in an already high-turnover, low-margin segment, and that means you will get lower quality agents over time. For tenants, the broker's fee cost doesn't disappear; it will get absorbed into upfront premiums and rent increases.' The cost of the broker's fee for tenants The broker's fee hit about half of the 2.3 million apartments in the city, including those units that are rent-stabilized. When nonprofit attorney Elizabeth Gyori and her partner were apartment hunting in Brooklyn last year, they coughed up about $4,000 to a broker—or 12% of their annual rent. 'We could have used that money for other things,' Gyori tells 'It could have gone toward savings to buy our own place, an emergency fund, or a higher general rent for a place that would have suited us better. 'I'm sad we don't get to take advantage of the change in law, but it will be really helpful for other people,' she says. 'I think it's fantastic that the law was passed.' What New York City renters can expect While the final word on the new law will be up to a judge overseeing the lawsuit filed by the Real Estate Board of New York and some brokerages, the board seems to expect the shift to happen. On its website is a fact sheet preparing landlords for what appears to be the inevitable. According to the new law, brokers representing a landlord can no longer charge tenants a fee in connection with a rental transaction. The exception is when the tenant specifically hires a broker to find them an apartment, and landlords are allowed to pay the tenant's broker. 4 The broker's fee hit about half of the 2.3 million apartments in the city, including those units that are rent-stabilized. Christopher Sadowski Additionally, rental listings must include all fees paid by the prospective tenant for the rental of the unit. This could include lost key, pet, first and last deposits, and move-in/move-out costs. Violations of the FARE Act may result in financial penalties of up to $2,000 and will be enforced by the New YC Department of Consumer and Worker Protection. (Complaints can be filed at 311.)
Time Out
09-06-2025
- Business
- Time Out
A new rental law is going into effect on Wednesday—here's what to know
New York renters, rejoice—or at least take a deep breath. Starting Wednesday, June 11, the long-dreaded broker fee may no longer be your financial burden. That's when the FARE Act, short for Fairness in Apartment Rental Expenses, goes into effect, flipping the script on who pays the often astronomical broker fees in New York City's rental market. The rule is simple: If a landlord hires a broker, the landlord pays the broker. If you hire a broker, you pay. That's it. No more shelling out $5,000 (or more) to someone you never hired just to snag a 500-square-foot walk-up in Alphabet City. Of course, this is New York, so things are complicated. The Real Estate Board of New York is still fighting the law in court, arguing it violates free speech and contract rights. But unless a judge intervenes at the eleventh hour, the FARE Act is happening, and the city's Department of Consumer and Worker Protection is locked and loaded with fines. Brokers who break the rules could be hit with penalties starting at $750 and going up to $2,000. Renters, meanwhile, should see some relief. StreetEasy estimates that average upfront costs could drop by nearly 42%, from around $13,000 to $7,500. That could mean more people can move—and move more often. But don't break out the Champagne just yet. Landlords are already adjusting. According to Curbed, some are raising rents, like the Clinton Hill owner who upped a one-bedroom from $3,200 to $3,600 on June 1. Others are cutting brokers out entirely and relying on word-of-mouth to fill units. A few seem ready to do the unthinkable: Talk to prospective tenants themselves. Still, experts say the doom-and-gloom predictions may be overblown. Many property managers already offer no-fee rentals and are used to absorbing those costs. And contrary to broker panic, nearly 57% of no-fee listings this year were still represented by agents, according to StreetEasy data. Bottom line: This law could inject some sanity into the city's rental market. Transparent pricing, lower barriers and fewer surprise fees won't create utopia. Still, it is very New York to need legislation just to avoid paying someone for doing something you never asked them to do in the first place.
Yahoo
05-06-2025
- Business
- Yahoo
Good Riddance to New York City's Tenant-Paid Broker's Fee
With the FARE Act set to shift the costly burden from renters to landlords, I've been reflecting on what the system actually offered me and other New Yorkers. In 2022, when I made the decision to move to New York City from New Haven, Connecticut, I was told that finding a place to rent for the first time would be a shock to the system. But after months of research—and an unholy amount of time scrolling Zillow, StreetEasy, and Craigslist—I finally found a listing for the perfect apartment. It was on the Upper West Side, within walking distance of my new job. It was a "one-bedroom flex," meaning my wife and I could set up a work-from-home space to accommodate our hybrid schedules. And it was beautiful: tucked atop a prewar, south-facing townhouse—with high ceilings, exposed brick, an ostensibly working fireplace, and a pretty incredible semiprivate rooftop terrace featuring views of 18 water tanks (I counted) that felt straight out of an Edward Hopper painting. The only problem was that the unit—listed at $3,850 per month—was nearly double what I had ever paid for an apartment before. Also, I hadn't fully internalized that New York is one of only two major U.S. cities where tenants are expected to pay a fee to brokers who are hired by landlords to show and fill their rental properties, which usually cost one month's rent or 15 percent of the annual rent, according to The City. (Though, because there is no legal cap on how much brokers can charge, there have been reports of brokers charging tenants even more exorbitant fees for highly competitive rent-controlled or rent-stabilized apartments.) The broker's fee for my apartment was 11 percent of the annual rent ($4,300), on top of the first month's rent and the matching security deposit. Now, the Fairness in Apartment Rental Expenses (FARE) Act—a landmark bill that shifts the burden of the broker's fee away from renters and onto the landlords who hire them, which Dwell contributor Anjulie Rao previously reported "could upend a hurdle in the city's notoriously difficult apartment hunting process"—is set to go into effect on June 11 (while the city's real estate lobby fights to block the law in the background). The FARE Act, introduced by Councilmember Chi Ossé of the 36th District and passed by City Council in November 2024, comes after years of thwarted attempts to reform the city's broker's fee system. So naturally, I've been reflecting on what I received in exchange for my compulsory broker's fee—and curious about the experiences of other New York renters. — I certainly didn't want to dip into emergency savings, but I suppose I wanted my perfect New York apartment more. So I called the number on the listing, thus commencing the service I received in exchange for $4,300. This—in order of least to most frustrating—is more or less what I got: No actual face time with the broker, who outsourced the showing to a colleague, which was fine (considering our later interactions), but it was still a bit jarring to be asked to Venmo a faceless-someone thousands of dollars. A real scolding when, on a weekday afternoon, I hadn't received the application I was promised and accordingly called the broker, who was shopping at Home Depot with his wife and asked why I was disturbing him. Typos everywhere, which is absolutely forgivable when it's an extra letter in a date ("May 1stt") but much less so when it suggests that the rent is $800 per month lower than advertised. Incorrect information on the official lease—including the wrong expiration date, a clause that the building did not allow pets (which it did), and a disclaimer that our fireplace was strictly decorative (which it wasn't). It's tempting to chalk my experience up to one-time bad service. But the more I reflect, the more I think that my experience is a product of a few layered problems that, taken together, amount to a systemic failure for New York renters. According to a recent New York Times story, StreetEasy reported that as of March 2o25, roughly 57.5 percent of rentals on its platform did not require tenants to pay a broker's fee. This means that avoiding paying a broker's fee could cut a New York City renter's housing options almost half in an already fiercely competitive rental market. — When I told my coworker I was seeking the perspectives of folks who've had notable experiences with brokers, he asked me if I had tried throwing a rock. In New York, they're everywhere. Indeed, it didn't take much looking to learn that another renter on the Upper West Side, Fabrice Houdart, a human rights advocate, had a similarly frustrating encounter with not just any broker, but the very same one who listed my unit. After not hearing back from the broker about a rental application for nearly a week, Houdart CC'ed the broker's manager, which seemed to anger the broker so much that he withdrew the offer against Houdart's wishes. The urgency was high for Houdart, a single father seeking housing near the school his twins were set to attend. Ultimately, after filing a complaint with the New York Department of State, Houdart cut his losses and secured a different apartment the following week (with a 12 percent broker's fee). But the experience left him with a sour taste. "I had this very awful experience because I had zero power. I feel the broker and the landlord have all the power," Houdart says. " [The] goal was to make as much money as possible. And I was only a number." For other New Yorkers, forced broker's fees have acted as a barrier to renting altogether. Alex Sramek, a technical writer, first moved to New York in 2013, and was initially excited when he found an "unreasonably cheap" three-month sublet within a three-bedroom unit in Washington Heights. Sramek moved in and immediately hit it off with his new roommates. But three months later—when the sublease period was ending and the group identified another nearby apartment to move into together—they were told they would have to come up with about a 15 percent broker's fee, which they couldn't afford. "We ended up just splitting ways," Sramek says. "We each just sublet in different apartments and we lost touch and it was kind of the end of that." After years of bouncing around from sublease to sublease, Sramek eventually landed his own lease on a one-bedroom apartment. The catch? It was only possible for him after the New York Department of State issued guidance to pause forced broker's fees during the pandemic in 2020—guidance that the New York State Supreme Court overturned in 2021 after the Real Estate Board of New York sued. Ever since that brief reprieve, some New Yorkers have been waiting for a bill like the FARE Act to eliminate forced broker's fees once again. Tim Samuel, a software engineer in Astoria, who has paid two broker's fees in New York and describes them as "nonsensical," was excited enough about the legislation that he and some friends attended the City Council hearing at which the bill passed in November. "We were in the background, just supporting and being there…forty-two members out of the fifty-one voted yes." That tally was enough to establish a veto-proof supermajority, meaning supporters of the bill could feel optimistic about its becoming law. That optimism extends to the FARE Act's sponsor, Chi Ossé, who developed the bill after several poor encounters with brokers during his own apartment search in Crown Heights. Ossé kept asking himself the same question: "Do you really want one month's rent for this apartment and you're not even showing up and giving a guy a tour?" When I recently spoke with Ossé, he made a point to say that he isn't "anti-broker." In fact, he ended up hiring a broker himself and had a perfectly positive experience. But he is "anti-things not being fair" and takes issue with the fact that the fees are forced on tenants who never hired brokers in the first place. When I asked Ossé what greater fairness might look like as the law goes into effect, he emphasized what renters will gain: "This just makes mobilization around housing as a tenant in New York City a lot more affordable…and [it] gives tenants more bargaining power, which they don't usually have in the current system." To me, it looks a lot like the sketch of a better future. After years of giving up money and trust in the system, New York City renters are finally set to get something back. Top photo byRelated Reading: Will NYC Renters Finally See the End of the Dreaded Broker's Fee? What the Roaches in My Rent-Stabilized Apartment Taught Me About the Housing Crisis
