By: Rob Otto

With just days to go before a sweeping tenant-friendly law kicks in, New York City’s real estate industry is scrambling to block a broker fee ban that could reshape how rentals are paid for across the five boroughs.

The Real Estate Board of New York (REBNY) — representing more than 10,000 industry professionals — filed a motion in federal court earlier this month to stall the Fairness in Apartment Rental Expenses (FARE) Act, which is slated to take effect June 11, as first reported by the New York Post.

Passed with overwhelming support in the City Council (42-8), the FARE Act shifts financial responsibility for broker fees away from renters and onto landlords — at least when brokers act solely in the property owner’s interest. That means tenants will no longer be forced to fork over thousands of dollars in fees to agents they never hired or consulted with.

Under the new rules, any fees a tenant is responsible for must be clearly disclosed in both lease agreements and rental listings.

Tenant advocates say it’s a long-overdue step toward affordability in one of the most expensive housing markets in the country. According to OpenIgloo, broker fees in NYC commonly run 15% of the annual rent — adding up to serious upfront costs.

Opponents of the law, including REBNY and some brokers, claim it will backfire — pushing landlords to either raise monthly rents or abandon the rental market altogether due to mounting regulations. Some even argue it infringes on their constitutional rights.

In court documents filed in December, REBNY’s lawyers called the legislation “profoundly misguided,” arguing it violates both state and federal laws — and even freedom of speech and contract rights.

The new law does not ban broker fees outright — it simply requires that whoever hires the broker pays them. That means if a tenant chooses to use a broker to find an apartment, they’ll still foot the bill.

But if the broker is hired by a landlord (and many are), the landlord will now have to cover that cost — potentially out of pocket or, more likely, through rent hikes.

Industry groups like the New York State Association of Realtors warn that the law could slash online listings in half, drive up costs, and open the door to a wave of lawsuits targeting brokers and landlords alike.

Some agents see the writing on the wall. “The broker should be paid by whoever hires them — that’s fair,” said Violetta Weddepohl, a broker with Serhant. “But landlords will just increase rent, so tenants may still pay in the end, just in a different way.”

Will This Actually Help Renters?

Yes — at least in the short term, according to real estate platform StreetEasy. A December analysis from the site predicted that upfront lease costs on impacted units could drop by over 40% once the law takes effect.

In prior cases, landlords who stopped charging upfront broker fees did not raise rents faster than the rest of the market, the report noted.

“Even if they ban broker fees, landlords will find a loophole,” said Fort Greene resident Georgi Georgiev, speaking to the Post. “We’re always going to end up paying.”

Others are cheering the change. “It’s about time,” said Betsy Laikin, a film producer. “Why are we paying brokers thousands of dollars just to sign a lease for an apartment with already outrageous rent?”