July 07, 2025
The real estate industry isn’t backing down without a fight.
Just as New York City’s Fairness in Apartment Rental Expenses Act (FARE Act) took effect, major real estate organizations like the Real Estate Board of New York and the NY State Association of Realtors filed an appeal to block it.
Their request to delay enforcement was denied by a federal judge, meaning the new rules are officially in play—for now.
Here’s what’s at stake: the FARE Act requires landlords, not tenants, to pay the broker fees when listing an apartment. That’s a major shift in a city where renters are used to shelling out thousands just to sign a lease.
According to StreetEasy, the average renter pays close to $13,000 in upfront costs—often including broker commissions hired by landlords but paid by tenants.
The real estate industry argues this law is unconstitutional, citing interference with private contracts and even claiming it restricts their free speech.
Their concern? Landlords will have to absorb these broker fees, possibly making rent-stabilized units financially unsustainable or pushing up rents across the board to compensate. From their perspective, the law doesn’t eliminate costs—it just shifts who pays them.
But for renters already stretched thin, this change could be a relief. Many had little choice but to pay broker commissions even when they never hired or interacted with the broker in the first place.
Now, with the law in effect and legal challenges moving up to the U.S. Court of Appeals, we’re likely to see some tension in how deals are negotiated and how rental prices adjust.
In the short term, landlords may attempt to bake these costs into higher monthly rents. Whether that ends up being more or less expensive for renters over the long run remains to be seen.
One thing’s for sure: this law is already reshaping NYC’s rental market—and both sides are watching closely.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
