realestate

NYC Council Abolishes Tenant Broker Fees, Paving Way for Possible REBNY Lawsuit

City Council Approves Measure Ending Tenant Fees for Unhired Agents.

T
he New York City Council has approved the Fairness in Apartment Rental Expenses Act (FARE), which prohibits rental brokers from collecting fees from tenants who do not hire them. The bill, sponsored by Council member Chi Ossé, aims to give tenants more leverage in lease renewal negotiations with landlords by eliminating upfront costs associated with broker commissions.

    Under current law, tenants typically pay 15% of the annual rent to brokers, adding thousands of dollars to moving expenses. Ossé argues that this cost will be passed on to tenants through increased rents if landlords are allowed to absorb it. The Real Estate Board of New York (REBNY) has opposed the measure, proposing instead that disclosures to tenants be ramped up rather than changing how brokers are paid.

    The FARE Act requires landlords or agents to provide tenants with an itemized list of all fees they expect to pay, and failure to do so could result in fines. The bill also opens the door for tenants to sue agents who break its rules. Officials have tried to reform rental broker fees since 2019, but this is the first time a measure has passed with a veto-proof majority.

    Mayor Eric Adams has expressed concerns about how the bill would affect small property owners and has not said whether he will veto it. The Council's approval of the FARE Act comes as the mayor faces low approval ratings and an indictment, making it less likely that he would block a bill favored by tenants.

New York City Council votes to abolish tenant broker fees in NYC.