Starting June 12, 2025, renters in New York City will see a significant change in how broker fees are handled. The Fairness in Apartment Rental Expenses (FARE) Act requires the party who hires a broker to pay their fee. The law is designed to relieve renters of the expensive cost that often comes with moving, even when they didn’t initiate broker services. Here’s what the law changes and what it could mean for renters, landlords, and brokers.
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Landlords to Pay Now
Under the FARE Act, the person or entity that hires the broker must cover their fee. That means landlords who list apartments using a broker are responsible for paying that broker’s fee. Previously, tenants often had to pay fees equaling one to two months’ rent even when landlords hired the broker. Now, tenants are only required to pay if they hire a broker to help find an apartment.
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Enforcing the FARE Act
The New York City Department of Consumer and Worker Protection is tasked with enforcement. Violators can face fines starting at $750 for the first offense, $1,800 for the second, and $2,000 for each subsequent violation. Renters can report violations through 311 or by filing a complaint online.
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A Push for Transparency
The law also requires full disclosure of all fees before signing a lease. This measure aims to reduce surprise costs and give tenants more clarity before committing to an apartment.
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The Cost of Moving in NYC
Broker fees have long been a heavy burden for New York renters. In 2024, the average upfront cost of moving was close to $13,000, including the broker’s fee, first month’s rent, and security deposit, according to StreetEasy. Without the broker fee, the cost dropped to around $7,500, a significant difference for tenants in a high-cost housing market.
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Impact on City Finances
The change may also benefit the city’s budget. According to the Independent Budget Office, over the past two years, the city spent roughly $141 million in broker fees through emergency assistance programs like One Shot Deal and housing vouchers. Redirecting that money could support other housing initiatives or reduce the taxpayer burden.
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Legal Challenges Still Pending
Though the law is active, legal disputes continue. The Real Estate Board of New York (REBNY) sued in December 2024 to block the law. A federal judge recently denied their request for an injunction, allowing the law to go into effect, but did not dismiss the case. This means future changes are still possible depending on the court’s final decision.
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Broker and Landlord Reactions
Some brokers and landlords have warned that rents will rise as they adjust to cover the broker fees. REBNY President James Whelan expressed concern that the law will reduce available listings and increase rental costs. However, early data suggest this may not be entirely true. In 2024, no-fee listings were 4.2% more expensive than similar apartments that still charged a broker fee. Still, StreetEasy economists emphasized that rent trends are more influenced by supply and demand than by broker fees alone.
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