Council Member Chi Ossé speaks at a rally outside City Hall prior to the vote to pass the FARE Act, which ends forced broker fees for tenants. Image Credit: Gerardo Romo / NYC Council Media Unit.
On November 13, 2024, the City Council voted to approve the FARE Act, which requires brokers to be paid by the party who hired them. The bill was sponsored by Council Member Chi Ossé.
The bill, Int. 360-A, shifts the common practice in New York City where new tenants are expected to pay the broker fees even if the landlord is the one who hired the broker. These fees can range from one month’s rent to a percentage of the annual rent, in addition to the first month’s rent and a security deposit; this can lead to upfront costs of at least $10,000 for many prospective tenants, without factoring in the costs of moving. Up until today, New York City was one of the few jurisdictions in the nation that had this practice. For CityLand’s prior coverage of the FARE Act public hearing from last June, click here.
The bill still gives tenants the option to hire and pay for their own broker if they wish. The bill also requires rental listings to clearly disclose each fee to be paid by prospective tenants. Landlords or their brokers will be required to provide a written breakdown of each fee with a description of the fee, and the tenant must sign the disclosure prior to signing the lease. The disclosure must be kept by the landlord or their broker for three years and provide a copy to the tenant. There are penalties for violating this law, and a private cause of action granted by the bill.
The bill passed 42-8, giving it a veto-proof majority. Mayor Adams has 30 days to sign the bill, which he had previously criticized. If he returns the bill unsigned in 30 days, it will still go into effect 180 days later, during next summer.
Council Member Ossé stated, “The system of forced broker fees is an affront to all New Yorkers. Today, we end that system. The victims of the old paradigm are too many to count. Families unable to have another child, because they cannot afford to move into a larger home. Children aging out of their parents homes unable to find a place in their own communities. Victims unable to flee domestic violence. Workers unable to live near their jobs, or in their city at all. Anyone who is hoping to bring their talents and passion to our great city but can’t afford to get through the front door. Today the New York City Council proved it can put the interests of the people first and be an example of good governance. This is a win for our city and for healthy democracy.”
By: Veronica Rose (Veronica is the Editor of CityLand and a New York Law School graduate, Class of 2018.)