NYC Landlords Now Required to Pay Broker Fees: What Renters Need to Know About the New FARE Act

The Fairness in Apartment Rental Expenses (FARE) Act, a newly enacted law in New York City, is set to take effect on June 11, 2025. This legislation shifts the responsibility for broker fees from tenants to landlords when landlords hire agents to list rental properties. Historically, tenants have often shouldered these broker fees, which can range from 12–15% of the annual rent—adding thousands of dollars to the cost of securing an apartment.

The law passed the City Council with a strong 42–8 vote, enough to override a veto. Although Mayor Eric Adams, a former real estate broker himself, declined to sign the bill, it is still set to become law without his signature.

In response to the impending change, the Real Estate Board of New York (REBNY), along with several brokerages and co-op boards, has filed a lawsuit in federal court seeking to block the law’s enforcement. The suit argues that the FARE Act infringes on constitutional rights, including the First Amendment and the Contract Clause, by interfering with pre-existing agreements and potentially limiting the advertising of rental listings. Industry representatives also claim the law could lead to increased rents and a decrease in available rental housing.

City officials, however, have defended the legislation, emphasizing its goal of easing the financial burden on renters. With roughly two-thirds of New Yorkers living in rental housing, advocates argue the law addresses a longstanding obstacle to housing access by reducing high upfront costs.

Legal experts suggest it’s unlikely the courts will act quickly enough to halt the law before it goes into effect. Once active, violations could result in penalties—up to $1,000 for a first offense and $2,000 for any repeat violations within two years. The Department of Consumer and Worker Protection will oversee enforcement and lead efforts to educate the public about the new requirements.

While the legal challenge plays out, many renters and housing advocates view the FARE Act as a much-needed shift toward fairer rental practices in one of the nation’s most expensive housing markets.