Is the ‘FARE’ Bill ‘FAIR’ To Landlords?
The Fairness in Apartment Rental Expenses Act (FARE) is a new bill just passed by the New York City Council that addresses rental broker fees. The law prohibits rental brokers hired by landlords from charging fees to tenants. Previously, NYC tenants typically paid brokers 15% of annual rent when signing a lease. According to Council member Chi Ossé, who sponsored the bill, the legislation aims to reduce upfront costs for tenants and provide tenants with more negotiating power with landlords. However, what the bill instead may do, is drive the cost of rent up.
The bill essentially shifts the financial burden of broker fees away from tenants in cases where the landlord initiated the broker relationship. The bill, Int. 360-A, changes the common practice in New York City where new tenants are expected to pay broker fees, even when the landlord hired the broker. The bill does still allow tenants to hire and pay for their own broker if they wish. The bill passed with a veto-proof majority of 42-8. Mayor Adams has 30 days to sign the bill, which he had previously criticized. If he does not sign it, the bill will still go into effect 180 days later.
— Jamie and Jacqui
You can view a PDF of the proposed new bill here
