The New York City Council passed groundbreaking legislation Wednesday requiring landlords, not tenants, to pay real estate broker fees. The Fairness in Apartment Rental Expenses (F.A.R.E.) Act passed with a veto-proof majority of 42-51 votes.

The law establishes a simple principle: whoever hires the broker must pay their fee. This marks a significant shift from New York’s unique system where tenants typically pay broker fees amounting to 12-15% of annual rent, despite landlords hiring the brokers.

“What other industry exists where someone else orders something, and then someone else has to pay for it?” said Councilmember Chi Ossé, who introduced the legislation. The new law aims to reduce upfront costs for renters, who currently often need around $10,000 to secure a one-bedroom apartment when combining broker fees, first month’s rent, and security deposits.

Council Member Chris Marte praised the legislation as “monumental,” suggesting it breaks the brokers’ monopolistic control over housing accessibility.

Industry Pushback and Mayor’s Concerns

Real estate groups strongly oppose the law, arguing landlords will simply incorporate broker fees into higher rents. Bess Freedman, CEO of Brown Harris Stevens, contends that “almost 50 percent of units are no-fee apartments” and fees are negotiable.

Mayor Eric Adams expressed concern that the legislation could transform one-time broker fees into permanent rent increases. However, Ossé counters this argument on two fronts:

1. Such increases would be illegal for the city’s 47% rent-stabilized apartments
2. Market forces, not landlord preferences, determine rent levels

“If your landlord could increase your rent tomorrow, they would have done so yesterday. They’re not holding back,” Ossé argued.

Implementation Timeline

The F.A.R.E. Act will become law either with the mayor’s signature within 30 days or automatically if unsigned. The law takes effect 180 days after enactment, aligning New York with standard practices in other major U.S. cities.