Latest news with #REBNY
Yahoo
13-06-2025
- Business
- Yahoo
Renters Face Sneaky Price Hikes in New York City
New York City renters know when it's time to find an apartment, it's always going to be an expensive venture. Even with a new broker-fee ban, it looks like renting will still be a costly option. The Fairness in Apartment Rental Expenses Act (FARE Act) went into effect on June 11 and does not allow a landlord's real estate agent to charge a fee to the tenants which was often 12-15 percent of the annual rent. That law will greatly reduce the costs for people to move into an apartment, but Bloomberg is pointing out how landlords are trying to find other ways to pass the costs onto their tenants by rolling it into their rent. On average, it costs a person $12,942 to move into a new apartment with a security deposit, first month's rent, and the dreaded broker fees, per StreetEasy. Now, that price is expected to average $7,537, it is a significant relief for those hoping to reside in one of the five boroughs. Still, the Real Estate Board of New York (REBNY) pushed back on the bill, and they are sending a warning to renters. "New Yorkers will soon realize the negative impacts of the FARE Act when listings become scarce, and rents rise. We will continue to litigate this case as well as explore our avenues for appeal," REBNY President James Whelan said, per ABC7 New York, in court after a judge denied their attempt to stop the FARE Act. History disagrees with REBNY though. Apartments with a broker's fee had "an average increase in rent around 5.3% compared to the rest of the market, which saw an increase of 4.6%, according to StreetEasy Senior Economist Kenny Lee. REBNY will continue to appeal the judge's ruling, but people are celebrating the financial relief in the housing sector. Living in New York City has always come with a premium price, but the FARE Act will make a Face Sneaky Price Hikes in New York City first appeared on Men's Journal on Jun 12, 2025
New York Post
10-06-2025
- Business
- New York Post
Apartment broker fee ban to begin Wednesday after federal judge nixes suit to stop the new NYC law
The city's new law banning broker fees will go into effect tomorrow, after a federal judge shot down a real estate lobby lawsuit to block the ban. Judge Ronnie Abrams ruled Tuesday that a federal lawsuit challenging the Fairness in Apartment Rental Expenses Act was mostly rooted in policy disagreements — not constitutional questions. 3 A new law banning broker fees starts tomorrow after a federal judge tossed a last-minute effort to pause the ban. Helayne Seidman 'Plaintiffs' discontentment with the Act, however, stems not from its effects on their constitutional rights, but from a fundamental disagreement with its underlying policy,' Abrams ruled. Her decision tossed all but one claim from the lawsuit, and denied a request to pause the law as the case plays out. The FARE Act — passed in City Council with a veto-proof majority of 42-8 on Nov. 13 — prohibits agents representing property owners from charging prospective renters a 'broker fee.' 3 The Real Estate Board of New York and other groups claimed that banning broker fees would 'destroy' the rental market, according to their suit. Helayne Seidman The lawsuit, filed a month later by the Real Estate Board of New York, a broker's association and various property groups, claimed that banning broker fees would 'destroy' the rental market. Abrams said the suit was asking 'the court to act as a 'superlegislature'' to nix laws they disagree with. 'The court declines that invitation,' Abrams wrote, adding that the 'remedy is through the political process, not in court.' 3 Judge Ronnie Abrams said the suit was asking 'the court to act as a 'superlegislature'' to nix laws they disagree with. Kbarnofsky/Wikipedia But while the judge said the act could result in higher prices for landlords, they were better positioned to absorb the cost by increasing rents. 'Tenants, by contrast, cannot pass the cost of brokers' fees to landlords,' she wrote. REBNY President James Whelan said he was 'disappointed' that their motion to pause the law was kiboshed. 'New Yorkers will soon realize the negative impacts of the FARE Act when listings become scarce, and rents rise. We will continue to litigate this case as well as explore our avenues for appeal.'
New York Post
30-05-2025
- Business
- New York Post
NYC broker fee law — which protects tenants from costs — challenged by real estate agents in 11th-hour push
These agents are trying to broker a last-minute deal. New York City's real estate industry is making an 11th-hour bid to halt a new law that shifts the burden of costly broker fees away from renters before it takes effect next month. The Real Estate Board of New York, the city's powerful group of over 10,000 real estate professionals, filed a motion earlier this month seeking to put the Fairness in Apartment Rental Expenses Act on pause until the court battle over the law plays out. Here's everything you need to now about the new rules — which will launch on June 11 unless a federal judge agrees to REBNY's motion. 3 New York City's real estate industry is making an 11th-hour bid to halt the new broker fee ban before it takes effect next month. BullRun – What is the Fairness in Apartment Rental Expenses (FARE) Act? The FARE Act — passed in City Council with a veto-proof majority of 42-8 on Nov. 13 — prohibits agents representing property owners from charging prospective renters a 'broker fee.' It also requires that all fees a tenant owes be included in rental agreements and real estate listings. Proponents of the legislation say it will help ease the city's housing crisis by cutting down prohibitive up-front costs for tenants, including broker fees — which are typically about 15% of the annual cost of a rental unit, according to real estate website OpenIgloo. But critics of the law argue landlords may still sneak in broker fees onto tenants through higher monthly rents. Andrew Lieb, managing attorney of boutique real estate litigation law firm Lieb at Law, declares the Big Apple rental market will be 'forever changed' by the FARE Act. 'It will result in tenants losing access to housing from landlords who simply decide it's not worth it to be a landlord anymore,' Lieb told The Post. 'New York City is really making it impossible for a residential landlord to operate given the plethora of red tape that needs to be navigated just to sign a lease — and then enforcing that lease is a whole other disaster.' When do broker fees go away? Unless a federal judge rules otherwise, landlords will be barred from passing on the fee to a tenant after June 11, even if a lease was signed before the effective date, a rep from the Department of Consumer Protection confirmed to The Post. New York City is one of the few cities where landlords can hire a broker and pass the agent's fee onto a tenant. 3 The Real Estate Board of NY (REBNY) has taken the measure to file an 11th hour push in federal court to stop the city's new Fairness in Apartment Rental Expenses (FARE) Act from going into effect. New York landlord-tenant lawyer Altagracia B. Pierre Outerbridge expects the mandate to go into effect, and that a federal judge is 'probably not going to block the law' since the court hasn't yet issued a decision. 'The fact that a month has passed (and the law is going into effect in two weeks) without the Court doing anything suggests that it doesn't feel a huge rush to get involved,' Pierre Outerbridge told The Post. Does this mean that all broker fees are illegal? Landlords and tenants can still hire their own brokers under the FARE Act. But landlords can't shift the cost of a broker that is 'exclusively representing the landlord's interests' onto a tenant. This includes fees for brokers who publish listings with the landlord's permission. 'The FARE Act ensures transparency for tenants to not unfairly be burdened with additional costs by placing the responsibility for a broker's fees on the party that actually hired them,' the City Council said in a statement. What are real estate agents saying? In the lawsuit filed in December, REBNY attorneys claimed the city's 'profoundly misguided' legislation violated federal and state laws, including constitutional free speech and contract rights. 'The FARE Act is constitutionally flawed on multiple accounts. We are confident that the Courts will agree with us,' a REBNY rep told The Post. The New York State Association of Realtors further argues the law would drive up rental costs, strip away 'over half' of online rental listings and open the 'floodgates for baseless lawsuits and penalties against brokers.' 3 Last year, the FARE Act was passed in the City Council, which will prohibit agents representing property owners from charging prospective renters a 'broker fee.' J.C. Rice 'The landlords who still want to use a broker and are allowed to raise the rent to accommodate the shift in responsibility will do so,' Pierre Outerbridge said, adding that some tenants are 'going to be shocked to pay an extra month's rent in broker fees in order to sign their lease.' 'It will exacerbate rental unaffordability,' Violetta Weddepohl, a broker at Serhant, concurred. 'As a result, when leases come up for renewal in a year or two, tenants will face even steeper rent increases. 'I have sympathy for the argument that the broker should be paid by the person who hires them,' she said, 'but the reality is that the landlords can get away with charging higher rent.' But real estate listing website Streeteasy estimated the average cost to sign a lease on rentals that would have currently charged a broker fee will fall by 41.8% once the law takes effect. 'Rental properties that stopped charging tenants a broker fee in the past did not increase rents beyond broader market trends,' reads a December report from the site. 'The lock-in effect of high upfront costs made it easier for landlords to raise rents faster.' What are New York City residents saying? New Yorkers who spoke to The Post were largely in favor of the law taking effect, with nearly every local citing housing affordability as a major concern. 'This is great,' Betsy Laikin, a film producer, told The Post. 'The rents are higher than they've ever been. Why should we pay a broker fee, on top of these rents?' 'I think the broker fee … should not exist,' Luke Atkinson, a 39-year-old painter from Bushwick, Brooklyn, added. '[Brokerage] is a job that doesn't need to exist, and they know it deep down in their souls. 'That's why they're insecure,' he added. 'That's why they're always hustling because it's a job that doesn't need to exist.' Georgi Georgiev, a bartender from Bulgaria who now resides in Fort Greene, is less optimistic. 'One way or another, we are going to pay it if we are getting an apartment, no matter what. We're never gonna not pay,' Georgiev, 45, said. 'There is gonna be so many loopholes.' What happens if an apartment has a broker fee after the law is in effect? The city's Department of Consumer Protection will be enforcing the law after it goes into effect. It's estimated the agency will require about $500,000 in the next fiscal year for outreach and education related to the law, according to City Council records. Those caught in violation of the law will be subject to a $1,000 fine for the first violation and a $2,000 fine for each violation within a two-year period. To file a complaint regarding a FARE Act violation, consumers can visit or call 311 once the law is in effect.
Business Times
04-05-2025
- Business
- Business Times
NYC real estate industry asks judge to block new broker fee law
[NEW YORK] A key real estate organisation and other industry groups asked a federal judge to block a New York City law that requires landlords to pay fees for the brokers they hire, saying the rule that goes into effect next month will increase rents and make it more difficult for lower-income tenants to find housing. The Real Estate Board of New York (REBNY) and others, including the New York State Association of Realtors, sued the city in December over the rule, which forces property owners to pay for their brokers instead of passing those costs to their tenants, a longstanding practice that has perturbed renters for decades. During a court hearing on Friday (May 2), lawyers for the groups urged US District Judge Ronnie Abrams to halt to enforcement of the rule while the lawsuit proceeds. The ban, which was passed by the city council in November, is scheduled to take effect on Jun 11. The judge didn't say when she'll reach a decision. Because landlords often sign exclusive contracts with brokers to list their properties and find tenants, the law 'severely and permanently impinges on listing agreements between brokers and landlords', in violation of the Constitution's bar against state laws impairing private contracts, Claude Szyfer, a lawyer for REBNY, told the judge. The law also would violate the free-speech rights of landlords and brokers who publish real estate listings and then seek to receive compensation from tenants for the cost of the listing service, Szyfer said. Two lawyers for the city defended the law. They said it will help address the city's housing crisis by making apartments more affordable and easier for renters to move to better properties without having to pay thousands of dollars to brokers they didn't choose. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up The current rule is 'causing low and middle-income people – especially people of color – it is causing them to leave New York', one of the city's lawyers told the judge. New York City renters who settle on apartments that have broker fees pay an average of nearly US$13,000 to secure the keys to a property, which frequently includes thousands of dollars in fees for brokers hired by landlords to secure tenants, according to an analysis by StreetEasy released last year. Roughly half of the listings on StreetEasy come with broker fees, which can range from one months' rent to as much as 15 per cent of annual rent. Lawyers for the city argued that the broker fees add a substantial cost to families who already are shelling out thousands of dollars upfront and a substantial portion of their income on housing. New York University's Furman Center, which studies housing, neighborhoods and urban policy, has found that more than than half of all city households spend 30 per cent or more on rent. New York and Boston are the only major American cities where rental broker fees are commonly passed to tenants even if they didn't hire them. But the industry contends the law will make rent-stabilised apartments too costly to operate and force landlords to raise rents to cover the cost of broker fees. They argued tenants usually pay less over the life of a lease when commissions are paid separately. Landlords claim some tenants already are refusing to pay broker fees even though the law hasn't taken effect yet. The suit alleges the city is simply villainising brokers and the act violates their constitutional right to free speech by not allowing them to publish open listings, and that the state already regulates brokers. It also contends the law violates the contracts clause of the US Constitution by interfering with agreements between landlords and brokers. 'New York City's brokers have built their businesses around the reasonable expectation that they can collect fees from tenants under conditions prohibited by the act,' the groups said in a court filing. 'If the act is permitted to go into effect, brokers will need to retool their businesses to – without publishing an open listing – attract tenants willing to engage them as tenants-side brokers. Or they must compete for a limited number of landlord-side exclusive listing agreements. Some will fail and be driven from the market; all will need to spend potentially unrecoverable sums to adapt to the new regime.' A state-approved broker fee ban was briefly in place in February 2020 just before the first Covid lockdown brought the rental market to a near halt. By the time renter demand began rising the next year, a court had struck down the state law and brokers were eager to capitalise on what quickly became a very competitive market where prices have continued to rise. The law could dramatically change the dynamics of the city's highly competitive rental market, where prices have soared since pandemic restrictions began easing in 2021. The median Manhattan rent was US$4,495 in March, just US$5 short of the record reached the previous month, according to appraiser Miller Samuel and Douglas Elliman. Prices have also set records in the outer boroughs. Tenant advocates argued that the large upfront costs are an unnecessary impediment for many renters who want or need to move. While low-income New Yorkers are more likely to face that struggle, no-fee units tend to be in pricier modern buildings. The city's residential brokers counter that eliminating the fees will be much more expensive for tenants in the long run, with landlords adding their marketing costs to rents. In March, 57.3 per cent of StreetEasy's listings were no fee, up from roughly 54.2 per cent from last year. BLOOMBERG
Yahoo
25-03-2025
- Business
- Yahoo
Now a mayoral candidate, Cuomo distances himself from rent reforms he signed into law
NEW YORK — Andrew Cuomo privately expressed regret to a receptive audience about elements of rent reforms he approved as governor, two people familiar with his remarks told POLITICO. Cuomo, the frontrunner in the race to unseat Mayor Eric Adams, last week shared his belated concerns about the 2019 tenant-friendly laws during a closed-door meeting of the executive committee of the Real Estate Board of New York. He suggested he should have sought, during negotiations with the state Legislature, to curtail the laws he believes excessively limited allowed rent increases tied to apartment building repairs. In a statement, his campaign spokesperson Rich Azzopardi substantiated Cuomo's hindsight-is-2020 message to the REBNY board. 'While well-intentioned, the 2019 bill had unintended consequences in some places — specifically changes involving MCI and IAI repairs,' Azzopardi said, referring to state-administered programs that regulate how much owners can raise rents after making improvements. 'There's been widespread acknowledgment of these issues, which subsequently were the subject of legislative tweaks.' The rent law overhaul, and Cuomo's role in it, has remained a source of discontent for some well-heeled real estate executives who have the means to bolster a super PAC backing Cuomo's candidacy. Cuomo's comments come as he works to amass support for his mayoral bid from business leaders, who are increasingly abandoning Adams with the mayor's reelection prospects in doubt. The former governor is a moderate Democrat who occasionally aligned with the left flank of the party, particularly during the post-2018 progressive heyday. In addition to the rent regulations, he also signed into law controversial criminal justice reforms. He's now running as a centrist promising to restore order to the city. 'We appreciate the Governor meeting with us and outlining his vision for New York City's future," REBNY President Jim Whelan said in a statement about the meeting. The real estate lobby staunchly opposed the state's systemic overhaul, which eliminated or severely restricted landlord-friendly provisions approved decades earlier. The laws caught the industry off guard and signaled a dramatic reduction of its longstanding dominance in Albany, following Democrats' retaking of the state Senate during the blue wave of 2018. REBNY had long funded Senate Republicans, counting on them to block any unfavorable rent changes. In 2019, the governor — a political strongman when he wanted to be — left the reforms up to the state Legislature, saying shortly before the Senate and Assembly reached a deal on changes that he would sign whatever they passed. It was widely expected that Albany lawmakers would reform the rent-regulation system after the Democrats' victory, but how far they went — particularly around building and apartment improvements — shocked industry insiders. During last week's REBNY meeting, the Democratic ex-governor specifically cited the law's effect on building investments, people familiar with the conversation said. Landlords have argued the 2019 laws hindered investment in rent-regulated buildings designed to keep them in decent condition. Their calls prompted some rollbacks in the wide-ranging Albany housing deal last year. The changes — slammed by tenant activists — allowed higher rent increases tied to apartment improvements, but landlord advocates say they did not go far enough.
