On Wednesday, the New York City Council will debate a proposal to change how New Yorkers pay broker’s fees. Typically, renters pay first and last months’ rent, a deposit and a broker’s fee, which can range from one month’s rent to 15% of the annual rent. However, some fees have gone beyond that. For example, one Flushing rent-stabilized apartment that cost $1,100 per month but had a $15,000 broker fee earlier. And one broker’s fee in 2022 for another rent-regulated unit was nearly $20,000.
Supporters of the bill say broker’s fees turn affordable apartments into unaffordable ones because there is no legal limit on what brokers can charge.
Here’s a quick breakdown of what you need to know about this bill.
The bill:
- Known as the Fairness in Apartment Rental Expenses (or FARE) Act.
- Requires whoever hires the broker to pay a fee.
- This means if the landlord hires the broker, the landlord pays the fee, not the tenants.
- The bill does not ban or cap brokers’ fees — it only changes who pays it.
- Introduced by Brooklyn Councilmember Chi Osse.
What supporters say:
- Supporters say broker’s fees turn affordable apartments into unaffordable ones because there is no legal limit on what brokers can charge.
- Earlier this year, one Flushing rent-stabilized apartment that cost $1,100 to rent had a $15,000 broker fee.
- In 2022, according to published reports, one rent-stabilized apartment on the Upper West Side was renting for $1,725 a month but had a broker’s fee of nearly $20,000.
Who is against it:
- The Real Estate Board of New York (REBNY), an organization supporting real estate agents and brokerage firms, opposes the bill and opposed a similar bill in the past.
- REBNY says landlords will just pass the cost onto tenants through higher rents in non-regulated apartments.
- Real estate agents say if this bill passes it would make it harder for them to make a living.
What happens next:
- There is a public hearing on Wednesday, June 12 at 10 a.m.
- Those who want to testify during the hearing can sign up here.
Need help paying broker’s fees?
- According to its website, the Human Resources Administration (HRA) issues a cash assistance allowance for a broker’s fee to those who are eligible. More information can be found here.
- There is currently limited help for those who can’t afford to pay a broker’s fee, but you can try and negotiate the fee to a lower amount or look for “no-fee” apartments.
- Rentals found in New York City’s housing lottery do not require a broker’s fee.
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