- The FARE Act requires landlords who hire brokers to pay the broker fees, removing this financial burden from tenants.
- The bill passed with 42 votes and is set to become law despite objections from real estate groups and concerns voiced by Mayor Eric Adams.
- Proponents argue it will improve housing accessibility for renters, while opponents worry it could lead to increased rent or limit housing options.
As reported by Bisnow, the New York City Council’s Fairness in Apartment Rental Expenses (FARE) Act, proposed by Council Member Chi Ossé, aims to alleviate one of NYC renters’ biggest complaints: being charged broker fees for brokers they didn’t hire.
Behind The Bill
In case you don’t live in NYC, sometimes Big Apple renters get sneakily charged broker fees for brokers they didn’t actually hire or use. Naturally, people complained, and the city answered.
The FARE Act shifts responsibility to the party hiring the broker—typically the landlord. On top of that, landlords must now disclose any tenant-responsible fees in online listings.
The bill passed with a strong majority, indicating it’s likely to override any potential veto from Mayor Eric Adams.
Industry Pushback
The Real Estate Board of New York (REBNY) and other industry representatives argue the FARE Act may ultimately increase costs for tenants if landlords incorporate broker fees into rents. REBNY President Jim Whelan emphasized the legislation could “make it harder for tenants to find housing” by adding to landlords’ costs.
However, the bill exempts rent-stabilized properties from transferring broker fees into rental costs, maintaining affordability protections for a significant portion of NYC’s rental market.
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Support From Advocates
Tenant advocates and brokers from firms like StreetEasy and Sotheby’s International Realty back the FARE Act, saying it could enhance renters’ ability to move by lowering up-front costs:
- StreetEasy’s Casey Roberts argues that the high broker fees in NYC have worsened the city’s housing crisis. They reduce renters’ mobility and impact brokers’ incomes as fewer renters can afford to move.
- Anna Klenkar from Sotheby’s notes that removing tenant-paid broker fees would make leasing easier and could improve the public perception of brokers.
Although Mayor Adams expressed reservations about the bill’s potential impact on rents, City Council Speaker Adrienne Adams made it clear the Council would counter any veto.
Given the Council’s veto-proof majority, the FARE Act is expected to pass into law, marking a significant change in the city’s rental process and addressing long-standing tenant complaints.d potential alternative uses for underutilized properties.
