T
he Real Estate Board of New York (REBNY) has filed a lawsuit to block the Fairness in Apartment Rental Expenses Act (FARE Act), which aims to end "forced broker fees" by making landlords pay for rental brokers' services. The law, set to take effect in June, would require tenants to only pay their own broker fees if they hire one. REBNY argues that this will lead to higher rents and fewer listings, as landlords pass the costs onto tenants and brokers stop listing specific apartments.

    The lawsuit claims that the FARE Act violates the First Amendment by restricting commercial speech, specifically rental listings. It also alleges that the law wrongfully interferes with private contracts between brokers and landlords, voiding "tenant pays" agreements. Additionally, REBNY argues that the city lacks authority to override state laws governing real estate brokers.

    Other plaintiffs include the New York State Association of Realtors, several brokerages, and co-op boards. The sponsor of the FARE Act, Chi Ossé, believes they have a strong argument against the lawsuit, having worked with the Law Department to draft the bill.

    The outcome of this lawsuit is uncertain, but it has sparked debate about the impact of broker fees on tenants and the real estate industry as a whole.