TENANTS are getting a major break as a new law bans brokers from charging renters thousands in fees.
The rule could save New Yorkers serious cash, but landlords and agents say the cost won’t disappear.
Broker fee typically ran 12 to 15 percent of the annual rent (stock image)[/caption]
The change kicks in on Wednesday in New York City.
Under the new Fairness in Apartment Rental Expenses Act, renters can no longer be billed for broker fees if the agent was hired by a landlord.
The move flips a long-standing practice that left tenants footing the bill for someone they didn’t hire.
Renters were often charged broker fees before they even signed a lease.
These charges typically ran 12 to 15 percent of the annual rent.
That meant apartment hunters were coughing up thousands just to lock in a unit.
Up until Wednesday, New York had remained one of the few cities where this system was still in place.
Seventy percent of people living in the city rent their homes, which will make the new law a sweeping change.
The City Council passed the measure in November.
It became law in December when Mayor Eric Adams declined to sign or veto it.
The FARE Act mandates that the person who hires the broker, usually the landlord, must be the one to pay them.
It bans brokers representing landlords from billing tenants.
“What other industry does that exist where someone else orders something, and then someone else has to pay for it?” City Councilmember Chi Ossé, the bill’s sponsor, told CBS.
But industry players argue it’ll just hike rent prices instead.
Tenant’s rights
According to InCharge Debt Solutions, tenants have several rights in the United States:
As a tenant, you have certain rights, and while they vary from state to state, there is a list of standard requirements virtually every landlord in the U.S. must provide:
- Heat (but not air conditioning)
- Running hot and cold water
- Locks and keys
- Smoke detector
- Clean and safe common areas
Landlords can keep security deposits for several reasons. These include:
- Unpaid Rent
- Damage to the Property
- Cleaning Costs
- Unpaid Utilities or Bills
- Breach of Lease Terms
- Abandoned Property
- Repairs Due to Tenant Negligence
If landlords don’t make any necessary repairs, tenants should:
- Review Your Lease or Rental Agreement
- Document the Problem
- Notify Your Landlord in Writing
- Contact Local Housing Authorities
- Repair and Deduct
- Mediation or Legal Action
- Protect Your Rent
“The landlord is going to have to pay us in some way,” said broker Janna Raskopf.
“It’s just going to be baked into the rent.”
The Real Estate Board of New York, which represents brokers, slammed the measure before it passed.
They warned tenants won’t escape the cost, it will just be hidden in higher monthly payments.
Still, backers say the law targets fairness and transparency.
The city’s Department of Consumer and Worker Protection will enforce the rule.
Violators could face fines up to $2,000 for repeated offenses.
The law only applies when the broker is working on behalf of the landlord.
Tenants who hire their own agent can still expect to pay.
In addition to the broker fee ban, the law also requires full disclosure of all tenant fees upfront.
Listings must include all charges that tenant might have to pay for the rental unit.
The law also presumes that any broker posting a rental listing has the landlord’s permission to do so, The City reported.
Brokers must confirm they have the landlord’s authority before listing to avoid legal disputes.
Listings where landlords are offering compensation to tenant brokers can still be submitted to the RLS normally.
However, listings where landlords are not paying tenant brokers must be entered as “Participant Only Network” in the RLS.
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