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yesterday

NYC Broker Fee Ban Takes Effect After Judge Rejects Real Estate Board Lawsuit

Expected to slash tenants’ upfront costs by about 42 percent, the rule empowers city regulators to impose fines on brokers and landlords who flout the requirement.

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Overview

  • Judge Ronnie Abrams denied a request on June 10 to pause the Fairness in Apartment Rental Expenses Act and allowed the broker fee ban to take effect on June 11.
  • Under the new law, whoever hires a broker—typically the landlord or property manager—must pay any commission rather than the tenant.
  • StreetEasy projects that average upfront leasing costs will fall from about $12,942 to $7,537, a 41.8 percent reduction for renters.
  • Opponents warn landlords may increase rents to offset broker fees, but data shows areas dropping fees saw only a marginal 5.3 percent rent rise versus 4.6 percent marketwide.
  • The NYC Department of Consumer and Worker Protection will enforce the ban with fines ranging from $750 to $2,000 per violation and renters can report unlawful fee demands.