July 18, 2025
The FARE Act just changed the game for New York City renters—and not everyone’s cheering.
Starting June 11, NYC landlords are now responsible for paying broker fees when they’re the ones hiring the broker. That means prospective tenants are no longer on the hook for those hefty commissions—often ranging from one month’s rent to 15% of the annual lease—unless they personally hire an agent to help with their search.
This is a big win for renters, especially in a city where every dollar counts. But like most shifts in real estate policy, the ripple effects are already raising eyebrows.
Upfront rental costs just got lighter. Historically, half of the city’s 2.3 million rental units—yes, even many rent-stabilized ones—came with a broker fee. That’s thousands of dollars out of pocket before even moving in.
Now, the landlord picks up the tab if they bring in the broker. And moving forward, listings must clearly disclose all tenant-paid fees, including move-in costs, pet fees, and more. No more guessing games or surprise charges at the lease signing.
Many in the industry believe landlords will try to offset this new cost by quietly inflating the monthly rent. While some argue that the competitive market will prevent big rent hikes, others—like Douglas Elliman's Keyan Sanai—believe it’s inevitable. Why? Because landlords see this fee as a business expense, and business expenses usually get passed on.
So instead of a one-time broker fee, tenants might now face higher recurring rent—and that adds up over time.
The brokerage world is split. Some agents see it as a positive—making listings more accessible to renters and eliminating a longstanding pain point that even high-income clients disliked. Others worry this law will squeeze brokers out of business, especially in the already tight NYC rental market, where margins are thin and turnover is high.
For tenants, it might look like savings at first, but it could mean fewer experienced agents and less personalized service down the line.
From my perspective as a local broker, this change will definitely shake up the rental process. We’re going to see more landlords covering fees upfront, but also likely adjusting rent to compensate. It may benefit renters short-term, but anyone planning to stay put for more than a year might end up paying more overall.
Whether you're a renter or an investor, now's the time to stay sharp. This new rule may open doors, but it’s also going to shift how deals are structured in one of the most competitive markets in the world.
