STATEN ISLAND, N.Y. — A new law in New York City is altering the landscape of rental broker fees, shifting the financial burden from tenants to landlords in certain situations.
Effective from June 11, the Fairness in Apartment Rental Expenses Act, commonly referred to as FARE, has clarified the responsibilities regarding broker fees associated with apartment rentals.
Realtors are reporting that many renters are unclear about the implications of this law and how it alters their obligations.
Annmarie Triolo, broker/owner of Triolo Realty Group in Prince’s Bay and newly elected president of the Staten Island Board of Realtors, emphasized the simplicity of the new legislation.
“It’s really black and white: Whoever hires the agent is who pays the agent,” she explained.
Under this law, if a landlord hires a broker to market their apartment, it is the landlord who is responsible for paying that agent’s commission.
Conversely, if a tenant chooses to employ a broker to assist in their apartment search, the tenant must cover that cost.
Triolo further clarified that while fees can be negotiable and vary depending on the agent, the new act does not remove rental broker fees entirely.
Media discussions have led many to believe that tenants are no longer required to pay these fees, but Triolo urged caution.
“But that is not the case,” she noted.
The FARE act has also established that a landlord’s agent cannot charge prospective tenants for their services.
Additionally, the law mandates that landlords disclose all upfront costs clearly and conspicuously in their rental listings and agreements.
While the law prohibits landlords from charging broker fees, it does not impede them from imposing costs for background and credit checks on potential renters.
“Are all agents in love with this new law? No,” Triolo remarked, though she expressed optimism about its potential benefits.
She believes the law will enhance transparency and help tenants understand the value of hiring a realtor.
The changes brought about by FARE come as a response to the previous practices in New York City, where nearly half of the city’s 2.3 million rental units required tenants to pay broker fees—often ranging from one month’s rent to 15% of the annual lease cost.
This meant renters were burdened with hefty fees on top of traditional costs like the first month’s rent, security deposits, and application fees.
With FARE in place, renters still have the option to hire their own brokers for assistance but are no longer responsible for covering the costs of agents hired by their landlords.
Violators of this new law face serious repercussions, including fines from the city that can go up to $2,000, in addition to potential state fines matching that amount.
The shift in responsibilities is viewed as a significant change, aligning New York City’s rental market with practices common elsewhere in the United States, excluding Boston.
Christian Emanuel, a real estate agent at Brown Harris Stephens, highlighted the financial relief this change could bring to tenants.
“You’re already lopping off all of this money that has to come out of people’s pocket up front,” Emanuel explained.
Triolo sees the act as a win not only for tenants but also for brokers.
“Rentals are a lot of work,” she said.
“The amount of time and effort it takes to locate apartments, market them, and sift through tenants is intense,” she added.
“It is reassuring to know that realtors will now be paid their value for all that work.”
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