2 days ago
NYC law ending broker fees for renters takes effect today
New York City's new broker fee law takes effect Wednesday, shifting the financial burden of paying brokers from renters to landlords.
The Fairness in Apartment Rental Expenses, or FARE, Act was passed by the New York City Council in November and became law in December after Mayor Eric Adams declined to sign the bill.
Supporters say the measure will make living in New York more affordable, while real estate groups say the cost will still be passed on to tenants through rent increases.
What is a broker fee?
A broker fee is a payment made to an agent who helps a prospective tenant find their rental unit.
Apartment hunters often pay thousands of dollars in fees before they sign a lease. New York, where 70% of the population rents, was one of the last cities in the country where passing broker fees on to renters was still allowed.
Broker fees typically add up to about 12-15% of the annual rent. The fees were not capped under New York law.
What is the FARE Act?
The FARE Act says the person who hires the broker - which is the landlord in most cases - has to pay them. It bans brokers who represent landlords from charging broker fees to tenants.
"What other industry does that exist where someone else orders something, and then someone else has to pay for it?" said City Councilmember Chi Ossé, who sponsored the legislation.
On the other side, the Real Estate Board of New York, which represents brokers, previously told CBS News New York that in many cases tenants will see rents go up as a result of the new law.
"The landlord is going to have to pay us in some way," broker Janna Raskopf said. "It's just going to be baked into the rent."
The Department of Consumer and Worker Protection has proposed fines of up to $2,000 for repeated violations of the law.
