NYC Council Just Voted To End Mandatory Broker Fees For Tenants

BROOKLYN, NY — Costly mandatory broker fees just became a thing of the past for New York City's tenants.

A bill that would stop tenants from being forced to pay for a broker they didn't hire just passed with a supermajority of 42 affirmative votes in the New York City Council on Wednesday. Eight councilmembers voted against the bill and one councilmember was absent.

The Fairness in Apartment Rentals Act (FARE Act) shifts the responsibility of paying the broker — the liaison who shows the apartment and strikes a deal between the renter and the owner — to the person who hired the broker.

The FARE Act was first introduced by Brooklyn Councilmember Chi Osse after his own experience trying to find an apartment in his district, which includes Bed-Stuy and part of Crown Heights.

"Tenants have been forced to hand over thousands of dollars in fees to brokers they never hired nor wanted," Osse said.

"Today is a win for the people of New York as we make official what has long been common sense," Osse said. "You should get what you pay for — and pay for what you get."

Up until now, tenants often had to pay for the broker hired by their landlord, who was representing the landlord's interests, as part of the lease-signing agreement, Osse said.

Those fees typically amount to at least one month of rent and sometimes as much as two months of rent, Osse said.

The bill was co-sponsored by more than 30 councilmembers, as well as the public advocate and the Queens and Brooklyn borough presidents.

The FARE Act also mandates that the landlord or broker provide a list of all the fees that tenants must pay upfront before the lease is signed. Fines start at $1,000 for a first offense but are capped at $2,000 within two years, according to the legislation.

The debate

Brokers and real estate interests largely oppose the new legislation, arguing that brokers will persist and landlords will simply increase rents to cover the broker’s fee.

Supporters of the bill, on the other hand, say that although brokers typically represent landlords and their interests, it is tenants who pay the fee – tenants who did not hire the broker in the first place.

And perhaps more importantly, in a city that is already prohibitively expensive for many, a broker fee creates a major barrier between renters and housing – a barrier the bill at hand would at least partially dismantle, they argue.

"Paying for a service you never asked for is exploitation," Brooklyn Councilmember Sandy Nurse said. Nurse is the co-chair of the council's progressive caucus. "I’m proud to vote for the FARE Act not only as a Council Member, but also as a renter who knows what it feels like to scrape together every last dollar to pay for someone else’s profit."

What's next

The bill will now be sent to Mayor Eric Adams to sign.

On Tuesday, during a press conference, Adams said he was hesitant about the bill and said that the bill would force landlords to increase total rents to pay for the brokers.

"People are leaving the city because it's just too expensive and we need to find ways of ensuring that we get that affordability but we can't do it with just a knee-jerk reaction," Adams said. "I think the bill has the right intention but sometimes good intentions do not get the results you're looking for."

There are 51 City Councilmembers in New York City, and two-thirds of these members – 34 of them – can override a mayoral veto.

Since the bill passed with 42 votes, it is veto-proof.

When the mayor signs it into law, the law will take effect in 180 days, which would be as soon as May 12, 2025, just in time for the summer housing rush.

For questions and tips, email Miranda.Levingston@Patch.com.