T
he Real Estate Board of New York is making a last-minute push to halt the city's new Fairness in Apartment Rental Expenses Act, which shifts the burden of costly broker fees away from renters. The law, set to take effect on June 11, prohibits agents representing property owners from charging prospective renters a "broker fee" and requires all fees owed by tenants to be included in rental agreements and listings.

    Proponents argue that the law will ease the city's housing crisis by reducing up-front costs for tenants, who typically pay around 15% of their annual rent in broker fees. However, critics claim landlords may still find ways to pass on these costs through higher monthly rents.

    Unless a federal judge intervenes, landlords will no longer be able to pass on broker fees to tenants after June 11, even if the lease was signed before the effective date. Real estate agents and industry groups argue that this will drive up rental costs, reduce online listings, and lead to more lawsuits against brokers.

    New York City residents are largely in favor of the law, citing housing affordability as a major concern. However, some worry about loopholes and potential increases in rent. The city's Department of Consumer Protection will enforce the law, with fines ranging from $1,000 to $2,000 for violations.

    Landlords and tenants can still hire their own brokers under the FARE Act, but landlords cannot shift the cost of a broker who exclusively represents their interests onto a tenant. This includes fees for brokers who publish listings with the landlord's permission. The law aims to ensure transparency for tenants and prevent them from being unfairly burdened with additional costs.

    Industry experts expect the mandate to take effect, with some predicting that rental properties will raise rents to compensate for the loss of broker fee revenue. Others argue that this will exacerbate rental unaffordability and lead to steeper rent increases in the future.