By Serj Markarian, Licensed Associate Real Estate Broker
New York City’s Fairness in Apartment Rental Expenses (FARE) Act went into effect yesterday after a federal judge declined to block its implementation. Passed by the City Council in November 2023 by a 42–8 vote, the law now requires landlords to cover broker fees when they hire an agent — relieving renters of the cost unless they’ve hired a broker themselves.
This marks a major shift in a city where broker fees often run as high as 15% of annual rent. For renters who move frequently, the savings could be significant. The use of platforms like StreetEasy has already lessened reliance on brokers. StreetEasy estimates average upfront costs could drop nearly 42%, from $13,000 to around $7,500, making it easier for tenants to relocate.
In March, 57.5% of rentals listed on the site didn’t require broker fees, meaning landlords were already covering the cost. Still, some brokers had been charging renters as well—effectively collecting fees from both sides, a practice the new law now prohibits.
The Real Estate Board of New York (REBNY) sued to stop the legislation, arguing it would cause confusion and drive up rents. Critics say landlords will simply pass the fees on to tenants through higher monthly costs. But StreetEasy maintains that any increases will stay in line with broader market trends and that many property managers are likely to absorb the costs, as they’ve done before.
That said, some landlords are already reacting. Curbed reports a few are raising rents or skipping brokers entirely, turning to word-of-mouth to fill vacancies.
REBNY also claimed the city overstepped, arguing that only the state can regulate broker conduct. But Judge Ronnie Abrams rejected most of the group’s legal challenges, stating courts shouldn't act as a “superlegislature” to strike down laws based on policy disagreements. While she acknowledged landlords may raise rents to offset the change, she noted they are better equipped to do so than tenants. One contractual claim remains under review, but the broker fee ban is now in place. Penalties for violations start at $750 and can reach $2,000.
REBNY has pledged to appeal. “New Yorkers will soon realize the negative impacts of the FARE Act when listings become scarce, and rents rise,” said REBNY President James Whelan.
For renters, though, the law is a welcome step toward transparency—and fewer surprise costs when it’s time to move.
