Real Estate
A New Law Banning Mandatory Broker Fees Poised To Take Effect This Week
Apartment hunting just got easier.
NEW YORK CITY — Costly mandatory broker fees are likely to become a thing of the past for New York City's tenants this Wednesday.
On June 11, a bill that would stop tenants from being forced to pay for a broker they didn't hire is expected to become law.
The bill, called 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.
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It was passed in the New York City Council back in December, and, according to StreetEasy, it will lower upfront renting costs by an estimated 41.8 percent.
The only thing threatening the bill's passage is an ongoing lawsuit between the city and the Real Estate Board of New York, which promptly sued to stop the law's passage in December. But, unless a judge intervenes at the last minute, the law will pass.
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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 in December, when the bill was passed. "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.
As part of the FARE Act, landlords and brokers are now required to provide a list of all the fees that tenants must pay before the lease is signed.
Fines start at $750 for a first offense but are capped at $2,000 within two years, according to the legislation.
For questions and tips, email Miranda.Levingston@Patch.com.
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