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Real estate broker fees banned in New York State
In a move that could upend New York City’s rental market, New York state regulators have decided tenants are no longer on the hook for broker fees.
NEW YORK - In a move that could upend New York City’s rental market, New York state regulators have decided tenants are no longer on the hook for broker fees.
The new rule clarifies sweeping rent reform laws passed by the state legislature last year. Now, brokers can only collect a fee from the building’s landlord, unless a renter hired the broker independently.
Tenants PAC is applauding the addendum saying it helps even the real estate playing field.
“Brokers and landlords have gotten away with taking advantage of tenants for too many years… These consumer protections are long overdue,” a spokesperson said in a statement.
But, brokers warn, all this will ultimately do is increase a tenant’s monthly rent because landlords will likely pass on the cost of a broker’s fee to their residents in the form of higher rent.
New York State law limits the cost of rent for roughly one million city apartments. There are more than 900,000 apartments that are not regulated.
This new guidance could also lead to thousands of real estate brokers losing their jobs.
The Real Estate Board of New York tweeted this in response:
"We oppose @NYSDOS’s guidance on rental broker fees. If enacted, it would negatively impact consumers, residential brokers in our community, and tenants. As we care deeply about New York City, we respectfully urge DOS to reverse course."