NEW YORK (1010 WINS) — A New York City Council bill introduced on Thursday would move the burden of paying brokers fees from tenants onto landlords in most cases.
The Fairness in Apartment Rentals Act, dubbed the FARE Act by its proponents, would require brokers fees be paid by whichever party hired the broker.
Usually, landlords hire brokers to find tenants to place in a rental unit. Brokers often charge a fee for this service, which landlords often foist on the new tenant rather than pay themselves. Oftentimes the fee costs as much as a month of rent or more.
The FARE Act, which was co-sponsored by Councilmembers Chi Ossé, Shaun Abreu and Oswald Feliz, aims to change this dynamic, by mandating whoever hired the broker pay the fee.
“In every other transaction, the party who hires the services pays for the service. New York is unique among major cities in America in having tenants often paying the fee for a broker’s services,” said Ossé in a statement. “This bill is simple and fair in assigning the cost to whoever sought the service.”
Landlords immediately expressed opposition to the bill, threatening to pass the cost of the fee on to tenants by raising rent if they can't make them pay it directly.
“Contrary to Council Member Ossé's claims, this legislation will negatively impact agent commissions while also leading to higher rents for many apartment seekers," said the Real Estate Board of New York, a trade association that lobbies on behalf of landlords, brokers and developers. "As we have done in the past, REBNY is focused on elevating the voices of thousands of agents to oppose this deeply problematic bill.”
Ossé pointed out that even if landlords were to tack the cost of the fee on to rent, the burden would be spread over the course of a year or two, alleviating the upfront cost that can leave tenants stuck with abusive landlords or put New Yorkers on the street after losing housing.
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