The New York City Council on Wednesday approved a bill that requires the landlord to pay the broker fee in most rental transactions.
Brooklyn Council Member Chi Ossé’s bill, called the Fairness in Apartment Rental Expenses (FARE) Act, passed with a supermajority of 42 votes, according to a press release.
The bill requires that in rental transactions, the hiring party, whether landlord or tenant, pay the broker fee. Under the old system, tenants were usually required to pay the fee to a broker hired by their landlord, creating upfront costs to move into a new home.
“The system of forced broker fees is an affront to all New Yorkers,” said Ossé. “Today, we end that system."
Tenants in the city have often paid a fee to a broker, even if they haven't met them, hired by the landlord or management company before signing a lease. Broker fees can range from one month’s rent to as much as 15% of the annual rent, according to data provided by the City Council. Between January and September of this year, the average New Yorker moving to a new apartment on average spent nearly $13,000 in upfront costs – the highest average recorded in New York City since at least 2010 when the data began to be tracked.
Ossé said paying this fee has prohibited many New Yorkers from moving around the city. This includes families, because many can't have another child as they can't afford to move into a larger home; children aging out of their parents homes because they are unable to find their own affordable place; victims unable to flee domestic violence; workers unable to live near their jobs, or in their city at all.
"Anyone who is hoping to bring their talents and passion to our great city but can’t afford to get through the front door," he said.
New York City Mayor Eric Adams, who must sign the bill for it to become law, on Tuesday said he thought landlords will simply pass the cost back to the tenant by raising rent.
“Don't hurt small property owners and try to give some relief to those who are trying to live in the city,” Adams said during his regular weekly press briefing. “The bill has the right intention but sometimes good intentions do not get the results you're looking for.”
Brooklyn Council Member Sandy Nurse said the fee is unnecessary.
"Paying for a service you never asked for is exploitation," she said. "Too many renters are unjustly forced to pay for their landlords’ brokers, adding thousands of dollars to an already costly process. Passing the FARE Act will not only end this predatory behavior but keep money in working class people's pockets."
