NEW YORK CITY — A major shift in New York City’s rental market begins today as a new law banning broker fees for renters officially takes effect. Under the Fairness in Apartment Rental Expenses (FARE) Act, landlords will now be responsible for paying broker fees when they hire an agent to lease their properties—not the tenants.
The law, passed by the New York City Council in November 2023 and allowed to take effect in December after Mayor Eric Adams declined to sign or veto it, aims to ease the financial burden on renters in one of the nation’s most expensive housing markets.
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What Does the Law Change?
Previously, renters often had to pay broker fees amounting to 12-15% of the annual rent—thousands of dollars upfront—on top of the first month’s rent and security deposit. New York City, where nearly 70% of residents rent, was among the few remaining cities in the U.S. where renters could still be charged these fees even when the landlord hired the broker.
Under the FARE Act, if a landlord hires a broker, they must pay the fee, not the tenant. The law does not ban broker fees altogether, but shifts the responsibility for payment to the party that hired the service.
Support and Pushback
City Councilmember Chi Ossé, who sponsored the legislation, said the law brings much-needed fairness to rental transactions:
“What other industry does that exist where someone else orders something, and then someone else has to pay for it?”
However, real estate groups and broker organizations have strongly opposed the measure. They argue that while renters might avoid upfront fees, landlords will likely increase rents to compensate for the new costs.
“The landlord is going to have to pay us in some way,” said broker Janna Raskopf. “It’s just going to be baked into the rent.”
The Real Estate Board of New York (REBNY) echoed this concern, saying tenants will end up bearing the cost through higher monthly rent over time.
Enforcement and Penalties
The city’s Department of Consumer and Worker Protection has announced proposed fines of up to $2,000 for repeated violations of the FARE Act. Brokers and landlords who continue to charge tenants improperly could face financial penalties.
