FARE Act in effect: Who pays broker's fee?

Broker's fees can no longer be passed down to NYC renters

FOX 5 NY's Audrey Puentes explains the FARE Act, which prohibits brokers who represent landlords from charging broker fees to tenants.

NEW YORK CITY - The Fairness in Apartment Rental Expenses (FARE) Act takes effect today, but what exactly is it, and how will it affect New Yorkers?

What is the FARE Act?

What we know:

The FARE Act, alternatively known as Local Law 119 of 2024, prohibits brokers who represent landlords from charging broker fees to tenants. The law also requires landlords to explicitly disclose all fees that tenants must pay before tenants sign a rental agreement.

In this context, a broker is an agent hired by a landlord to secure tenants – prior to the FARE Act's passing, landlords could pass these fees on to their prospective tenants.

Another aspect of the act is that landlords or their agents must provide tenants with an itemized written disclosure of all fees they must pay the landlord to rent an apartment.

It's important to note that the act does not prohibit landlords from charging any fees acquired from background checks and credit checks. Listing agents, who publish apartment listings with the landlord's permission, are also included in this act.

Who will enforce the act, and how?

Who they are:

The Department of Consumer and Worker Protection (DCWP) will enforce the act.

If the department finds that a person has violated the act, it will first issue a summons – if the charges are sustained, it will then issue a civil penalty. The violator in question could then be required to pay restitution for any illegal fees charged to tenants.

When did this all start?

Timeline:

The New York City Council passed the FARE Act on November 14, 2024; it was then made law exactly one month later.

New York City Mayor Eric Adams declined to sign the bill into law, but also took no action against it – as a result, the bill was made into law on Decemer 14.

The measure was set to take effect six months after, but the Real Estate Board of New York, along with other brokerages and landlords, sued to block its implementation, effectively delaying it.

A federal judge denied their request to pause the law until a conclusion had been reached in the suit yesterday, June 10, allowing the law to take effect today.