T
he Real Estate Board of New York (REBNY) is seeking a preliminary injunction to halt the FARE Act, which requires landlords to pay rental brokers rather than tenants. REBNY filed a lawsuit last month alleging that the law violates the First Amendment by discouraging the publication of rental listings and the Contract Clause by interfering with private contracts. The City Council approved the FARE Act in November with a veto-proof majority, and it is set to take effect in June.

    REBNY argues that brokers will need to adapt their businesses to comply with the new law, which could result in "potentially unrecoverable sums." They also claim that existing agreements between landlords and brokers should be protected, as they often last for a year or more. REBNY further asserts that the law doesn't bar brokers from seeking compensation from tenants, but rather restricts their ability to advertise listings and then charge tenants.

    Several property owners and brokers have filed statements in support of REBNY's motion, citing concerns about the impact on small landlords and the rental market. They argue that the FARE Act will lead to a decrease in advertised listings, making it more difficult for consumers to find apartments. The law could also drive brokers out of business, as fewer landlords decide against working with them.

    The lawsuit has been met with criticism from Council member Chi Ossé, who calls REBNY's efforts a "desperate attempt" to undermine the voices of city residents. However, REBNY maintains that the FARE Act will have unintended consequences for the rental market and small landlords.