R
enters in Massachusetts will soon see a change when moving to a new home, as a new law signed by Governor Maura Healey on July 4 eliminates the requirement for renters to pay broker fees. This fee, often exceeding $2,000, is typically paid by tenants even if they didn't hire the broker themselves. Housing advocates argue that this change will help alleviate the financial burden of moving, especially in a state where rents are at record highs.

    When signing a new lease, tenants usually need to pay four times their monthly rent upfront, including first and last month's rent, a security deposit, and the broker fee. However, landlords may now be responsible for paying this fee if they hired the broker. Some industry experts predict that landlords will raise rents to compensate for the lost revenue.

    A New York Post report suggests that after implementing a similar ban on renter-paid broker fees, New York City saw a 15% increase in rents. However, an analysis by StreetEasy found that average rents increased by less than 1%. Some argue that the new law will have little to no effect in Massachusetts, as it only clarifies existing requirements and doesn't address underlying issues.

    Real estate agents are concerned about confusion surrounding the change, citing a lack of time for preparation. The law's ambiguity has raised questions about who should pay broker fees in situations where both landlords and tenants are represented by brokers. Industry experts suggest that increasing housing supply is a more effective way to bring down costs rather than focusing on broker fees.

    Housing advocates see this as only one step towards addressing the state's affordability crisis, emphasizing that reforming broker fees won't address issues like excessive rent hikes or the lack of affordable housing options.