Massachusetts landlords are reacting swiftly to a new law eliminating tenant-paid broker fees by adjusting rent prices ahead of the policy’s August 1 rollout. Signed by Governor Maura Healey, the rule shifts responsibility for broker fees to landlords unless a tenant hires a broker by choice. Critics fear the move will simply lead to higher rents, as property owners seek to recover their costs.
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Law Shifts Fee Burden
A new Massachusetts law taking effect August 1 bans mandatory broker fees for renters, except when tenants directly hire a broker. Governor Maura Healey’s administration says the measure is designed to save renters thousands and make housing more accessible, following a similar move in New York City last year.
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Landlords Adjust Rent Prices
Several real estate agents confirmed that landlords are already increasing rents in anticipation of absorbing broker costs. “You’re going to see an uptick of rent right out of the gate,” said Mark Ruane of MGS Group Real Estate. Conversations with landlords suggest this adjustment is happening rapidly as listings hit the market.
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Boston’s Soaring Move-In Costs
In Boston’s competitive rental market, tenants typically pay four months’ rent upfront, covering first and last month’s rent, a security deposit, and a broker’s fee. While the new law eliminates one of these costs for most tenants, experts fear it will be folded into rent prices instead.
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Renters Brace for Impact
Renters in Boston’s high-demand neighborhoods are concerned about the financial impact. “People who are just starting out their careers, that extra one month of rent on top of everything is cumbersome and keeps them from getting ahead,” said South End resident Colin Flynn. Critics worry the new rule’s benefits may be lost if landlords raise rents.
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Comparing New York’s Policy
Though inspired by New York’s Fairness in Apartment Rental Expenses (FARE) Act, Massachusetts’ version differs slightly. In New York, landlords cover the entire broker fee, often raising rents to compensate. In Massachusetts, landlords or brokers pay if they initiate a listing, while tenants cover fees only if they voluntarily hire a broker.
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Concerns Over Enforcement
Doug Quattrochi, executive director of MassLandlords, warned that without enforcement, landlords might bypass the new rule. “Ultimately, if there’s no enforcement, there’s not gonna be anything different happening, sorry to say. Some property owners may try to pass the cost along to renters in the form of higher rent,” he explained, highlighting ongoing renter concerns.
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