New York City Ends Broker Fee Burden for Renters Under FARE Act

Starting June 11, 2025, a major shift in New York City’s rental market transformed the way broker fees are handled—marking a potential end to the long-standing practice of tenants paying steep commissions to brokers who actually work for landlords. Under the newly enacted Fairness in Apartment Rental Expenses (FARE) Act, the party who hires the broker must now pay their fee, a change that aims to reduce upfront costs for renters and bring more transparency to the leasing process. This reform comes amid a housing affordability crisis and growing calls for fairness in the city’s notoriously competitive rental landscape.

New York City’s Fairness in Apartment Rental Expenses (FARE) Act, officially Local Law 119 of 2024, officially became law in December 2024 and took full effect on June 11, 2025. Under previous rules, tenants were often required to pay a broker fee—even when the broker was representing the landlord. The FARE Act changes this by shifting responsibility: whoever hires the broker must pay the commission. Thus, if a broker is engaged by and works for a landlord, it is the landlord — not the renter — who pays the fee.

Starting mid‑June 2025, renters entering new lease agreements should no longer be charged fees for brokers representing the landlord. However, if a renter hires their own broker to help with house‑hunting or lease negotiation, they remain responsible for that commission. In practice, this is expected to significantly reduce upfront move‑in costs, with broker fees historically ranging from one month’s rent to as much as 15% of annual rent—and overall move‑in costs falling by nearly 42% on average.

The NYC Department of Consumer and Worker Protection (DCWP) is responsible for enforcing the law. Violators—landlords or brokers charging forbidden fees—face civil penalties, such as fines up to $750 for a first offense, increasing to $1,800 or $2,000 for repeated violations. Brokers and landlords must also provide all expected tenant fees in an itemized disclosure before lease signing, and clearly display all fees in rental advertisements and listing.

The Real Estate Board of New York (REBNY), representing thousands of brokers, swiftly filed a federal lawsuit arguing the law violates free-speech and contract rights, and could lead to less transparency in listings and higher rents. However, REBNY’s request for an injunction was denied, and the law is in full effect as of June 11, 2025. Critics warn landlords may respond by embedding broker costs into rental prices, while proponents see renewed fairness and competition in broker services.

Initial reports suggest tenant savings are materializing, with average move‑in costs dropping substantially. But landlords appear to be reacting quickly—some listing rent increases of several hundred dollars to compensate. On popular platforms like StreetEasy, roughly 1,000 listings disappeared overnight amid rent adjustments. While long‑term rent impacts remain debated, the FARE Act represents a major shift toward affordability and transparency in NYC’s competitive rental market.