'New Yorkers Have Been Getting Ripped Off for Decades': NYC Council Ends Broker Fees For Tenants

Renters in New York City may feel some relief as the City Council passed legislation eliminating tenant-paid broker fees. For decades, this practice has cost renters thousands of dollars in up-front moving costs.

The Fairness in Apartment Rentals (FARE) Act passed with a veto-proof majority of 42-8, shifting broker fee responsibility to landlords and management companies who hire the agents.

The new law will take effect within 180 days of signing.

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Despite being one of the most expensive rental markets in the U.S., New York City tenants often pay broker fees up to 15% of their first year’s rent, even when they didn’t hire the broker. "New Yorkers have been getting ripped off for decades and decades," strategist Bradley Tusk, who pledged $10,000 to support the bill’s implementation, said in a statement originally reported by the Gothamist.

City Councilmember Chi Ossé introduced the bill and addressed concerns about landlords passing costs to tenants through higher rents. "Forty-seven percent of homes for tenants in New York City are rent-stabilized, so it would be illegal for landlords to bake the fee into rent in that case," Ossé told CBS News.

The real estate industry strongly opposes the change. "The FARE Act, while well-intentioned, is misguided," Ashley Murphy, senior vice president at Brown Harris Stevens, told Realtor.com. "If landlords are forced to pay broker fees, they will likely bake the price into the rent and the lease will be more expensive each and every time a tenant goes to renew."

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The legislation requires landlords to disclose all tenant fees in rental listings and agreements. Violations carry penalties of up to $1,000 for first offenses and $2,000 for subsequent infractions within two years.

NYC Mayor Eric Adams expressed reservations about the bill’s impact. "The bill has the right intentions, but sometimes good intentions do not get the results you’re looking for," Adams said following the vote.

Beyond eliminating broker fees, the law mandates detailed fee disclosures signed by tenants before executing the lease. Landlords must retain the records for three years and provide copies to tenants.

The Department of Consumer and Worker Protection can pursue civil penalties and restitution in court, while individuals maintain the right to bring civil actions over violations.

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