Understanding the FARE Act: NYC’s New Broker Fee Law
Tenants in New York City have long faced high move-in expenses. Under the Fairness in Apartment Rental Expenses (FARE) Act, the party that hires a real estate broker is responsible for paying their fee. By removing the obligation to pay broker fees for services that renters did not initiate, the FARE Act is a meaningful shift in how the rental market functions.
What Is the FARE Act?
The Fairness in Apartment Rental Expenses Act, better known as the FARE Act, is a city law passed by the New York City Council in December 2024. The goal of this legislation is to change how broker fees are handled in residential rental transactions across the city. In most standard rental situations, this means landlords must cover the cost when they hire a broker to market an apartment or screen tenants.
The goal of this legislation is to change how broker fees are handled in residential rental transactions across the city. Historically, renters were often responsible for paying these fees, even when the broker worked on behalf of the landlord.
When Does the FARE Act Take Effect?
The FARE Act is set to take effect in June 2025. The law applies to new lease agreements signed after its effective date. This means tenants entering leases from June 2025 onward should not be asked to pay a broker fee if the broker represents the landlord. Lease renewals signed before that date may still follow the previous rules.
What This Means for NYC Renters
The FARE Act is expected to lower the upfront cost of renting for many New Yorkers. Previously, tenants often paid broker fees that ranged from one month’s rent to as much as 15 percent of the annual rent. For a $3,000 apartment, that could add $5,400 or more to move-in costs.
By shifting that cost to landlords, the law makes it easier for renters to secure housing without depleting their savings. This is especially helpful for first-time renters, students, or those relocating to the city who already face expenses like deposits, movers, and new furnishings.
Should renters hire brokers?
Even with these changes, some renters may still choose to work with a broker. This usually happens when the renter initiates the relationship, for example, by hiring a broker to help with apartment hunting or lease negotiations. In these cases, the renter would remain responsible for paying the broker’s fee, since the broker is working on their behalf.
There are several reasons a renter might go this route:
Brokers may offer access to listings not widely available.
They help navigate fast-paced markets and schedule showings.
They can guide clients through complex paperwork or tight timelines.
Renters who want professional support, especially those moving on short notice or looking in competitive areas, may still find value in hiring a broker directly.
What Renters Should Watch for in Listings and Leases
Even with the FARE Act in place, renters need to pay close attention to how fees are presented in listings and lease documents. While the law requires landlords to pay the broker when they hire one, that cost should not be passed on to the tenant through vague charges or renamed fees.
Common examples to watch for include:
“Management service fee” that closely matches a typical broker commission
Add-on application or processing fees that appear after an initial agreement
Charges not mentioned in the original listing
If a fee looks unusual or inflated, tenants should ask what it covers. If the explanation is unclear or seems inconsistent with the new law, the listing may be in violation. According to City Council legislation, any fees passed on to tenants must be clearly disclosed, and landlords or agents who fail to comply can face penalties.
Tenants can report questionable charges to the Department of Consumer and Worker Protection (DCWP), which is responsible for enforcing the law. It’s also helpful to keep screenshots of listings, email records, and lease documents in case of disputes.
The safest approach is to get all fees in writing before signing anything and to keep copies of any listing details that were referenced during the rental process.
How NYC’s Broker Fee Law Compares to Other Major Cities
New York City's FARE Act makes a notable shift in how broker fees are handled, but the concept of limiting or eliminating these costs for tenants is not unique. Several other major U.S. cities have different systems for managing who pays a broker and under what conditions.
In San Francisco, broker fees are rarely charged to tenants. Most landlords pay agents as a cost of doing business. The competitive nature of the rental market and state regulations make it uncommon for tenants to be on the hook for broker commissions.
In Boston, broker fees are more commonly split or passed on to tenants, though some landlords will cover them to secure renters more quickly. The system is flexible but varies building by building, making transparency a consistent issue.
Los Angeles largely follows the West Coast trend of landlord-paid commissions. Listings posted on public platforms typically do not involve fees paid by renters, especially for non-luxury buildings.
Compared to these cities, New York has long stood out for its high broker fees and for making tenants pay them even when they did not choose the broker. The FARE Act brings NYC closer to cities that prioritize tenant affordability and transparency.
This shift may also set a precedent for reform in other high-cost markets where tenants face similar challenges.
Red Flags in Listings and Lease Terms
If a listing seems vague about fees or introduces unexpected charges during the application process, it may be out of compliance with the law. Look for listings that clearly state who pays the broker, and avoid units where terms change once you show interest. The Department of Consumer and Worker Protection advises renters to keep a copy of the original ad and all correspondence with the landlord or broker.
In lease documents, read every line that discusses payment, fees, or commissions. If you spot terms like “administrative fee” or “processing charge” that were not disclosed earlier, ask for clarification and be prepared to walk away if the answer isn’t clear.
How to Report a Violation
If you believe a landlord or broker is violating the FARE Act, you can file a complaint with the Department of Consumer and Worker Protection. You’ll need documentation, such as a copy of the lease, the original listing, and any communication showing undisclosed or misrepresented fees.
You can begin the complaint process on the DCWP website, where instructions are provided in multiple languages.
Questions to Ask Before Applying for an Apartment
Who is paying the broker’s fee?
Are there any additional move-in fees not listed online?
Can I receive a copy of the full lease before signing?
Are there any non-refundable deposits or service fees?
Frequently Asked Questions
About the FARE Act
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The law takes effect in June 2025. It applies to new lease agreements signed on or after that date. Renewals or ongoing leases signed before then are not subject to the law’s requirements.
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Under the FARE Act, the party who hires the broker must pay their fee. In most cases, that’s the landlord. If a renter hires a broker directly to help them search or negotiate, the renter would still be responsible for the fee.
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Yes. If you choose to work with a broker to help you find a place, you are responsible for their fee. The FARE Act only applies when the broker was hired by the landlord or building manager.
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Ask who hired the broker. If the landlord did, and the fee is still being charged to you, that may be a violation. You can report the issue to the Department of Consumer and Worker Protection.
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Some landlords may adjust rent pricing to offset the cost of broker fees. There’s currently no restriction on this, and rent prices are influenced by market conditions. Renters should compare similar listings and review terms carefully.
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Many brokers oppose the law, stating it disrupts their business model. Some argue that tenants will lose access to helpful services or that landlords will pass the cost on in other ways. Broker groups like the Real Estate Board of New York (REBNY) have voiced concerns about long-term effects on the rental industry.
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They cannot legally rename a broker fee as something else if they hired the broker. Any fee passed on to a tenant must be disclosed up front and not contradict the law’s intent. Hidden or vague charges may be considered a violation.