After years of advocacy and litigation, millions (billions?) in added moving costs and lobbying, and a last-minute plea to suspend the bill, the Fairness in Apartment Rental Expenses (or FARE) Act has effectively killed the dreaded broker fee in NYC. According to Gothamist, federal judge Ronnie Abrams denied an eleventh-hour request from The Real Estate Board of New York asking for a pause on the bill’s implementation while lawsuits played out, sending the broker fee ban into effect today, June 11.
That means, as city councilman Chi Ossé (who introduced the FARE Act in 2023) recently pointed out, if you were amongst the unfortunate renters who signed a June 1 lease, you are likely one the last to pay somewhere between a month’s rent and 15-percent of your annual rent to someone who may not have had anything to do with you miraculously securing an apartment in the most competitive housing market in the country. The law transfers the burden of paying a broker fee to landlords, who “have a mechanism by which to pass the cost to tenants—namely increased rent,” according to Judge Abrams’ ruling. “Tenants, by contrast, cannot pass the cost of brokers’ fees to landlords,” the judge’s decision concludes.
The FARE Act also institutes a system of fines to keep both landlords and brokers in check. If either are caught charging a fee to prospective tenants, they can be charged $750 by the Department of Consumer and Worker Protection for a first violation, or as much as $2,000 for subsequent offenses. The department is encouraging renters to call 311 or visit their website to report landlords and brokers still charging fees. “We are excited to expand consumer protections for millions of renters across the five boroughs,” said department spokesperson Stephany Vasquez Sanchez.
With its implementation, the bill will save renters—who pay an average of roughly $13,000 in upfront moving expenses according to analysis from StreatEasy—a small fortune and a ton of stress. And sure, many landlords are already gearing up to bake the broker fee into the cost of rent. But some are doing the inconceivable and handling the listings themselves.
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