New York State has eliminated broker fees for renters, catching many in the real-estate industry by surprise and sending landlords into panic. The ruling, which went into effect on Wednesday, bans brokers from collecting fees from tenants, unless the prospective tenant hired the broker. Otherwise, landlords must foot the bill.
“This is a dire issue with our members,” Reggie Thomas, of the Real Estate Board of New York, told the New York Times. “It’s an all-hands on deck thing because this came out of left field.”
Landlord groups speculated that the fees would be passed onto tenants in rent increases, but nearly 60 percent of the city’s rental units are rent-regulated.
New York is one of the few cities in the country where tenants pay a broker
fee, which can be up to 15 percent of one year’s rent paid up front. Real-estate listing site StreetEasy reported that 45 percent of New York City rental listings last year included one, according to the Post. The new rule, combined with new rent laws passed in June capping security deposits at one-month’s rent, will make moving in New York City — a notorious money suck — a much more affordable process.
Renters and tenant activists are pleased. “It’s about rehousing 92,000 people,” Cea Weaver of Housing Justice for All, told the Times. “Hopefully it’ll make it easier for people being pushed from substandard housing to substandard housing.”