Short answer: under NYC’s FARE Act, in effect since June 11, 2025, whoever hires the broker pays the broker. A broker who represents the landlord, including one who lists an apartment with the landlord’s permission, cannot charge the tenant a broker fee. Tenants can still hire their own broker and pay that broker. Landlords must disclose any fees tenants must pay in listings and leases.
For decades NYC renters routinely paid broker fees, often 10% to 15% of a year’s rent, even when the broker worked for the landlord. The Fairness in Apartment Rental Expenses (FARE) Act, Local Law 119 of 2024, changed that. The real estate industry challenged the law in federal court and lost: the court refused to block it, and in July 2026 the Second Circuit upheld the law, so the city is enforcing it.
Who Pays the Broker Fee in NYC Now?
| Situation | Who pays the broker |
|---|---|
| Landlord hires a broker to list and rent the apartment | Landlord |
| Broker lists the apartment with the landlord’s permission | Landlord (the broker cannot charge the tenant) |
| Tenant hires their own broker to find an apartment | Tenant, under their agreement with that broker |
| No broker involved | No broker fee |
What Landlords and Brokers Must Do
- No fee to the tenant for a broker who represents the landlord or publishes the listing with the landlord’s permission.
- Disclose all fees a tenant must pay, in the listing and in the rental agreement, before the tenant signs.
- No disguised fees. Renaming a broker fee as a “key”, “administrative” or “processing” fee to get around the law is a violation the city has targeted.
Other Move-In Costs Tenants Can Be Charged
The FARE Act works alongside the state’s 2019 Housing Stability and Tenant Protection Act, which already limits most residential move-in charges: the security deposit is capped at one month’s rent, and application fees for background and credit checks are capped at $20 (and waived if the tenant provides a recent report). The first month’s rent is still due at signing.
What to Do If You Were Charged an Illegal Broker Fee
- Keep the listing, texts, emails, receipts and any agreement you signed.
- Ask the broker or landlord in writing for a refund, citing the FARE Act.
- File a complaint with the NYC Department of Consumer and Worker Protection online or through 311. The agency can impose penalties and has obtained refunds for tenants.
- Consider a civil claim; the law allows tenants to bring an action against violators.
What Landlords Should Do
Landlords should review listing and brokerage agreements to confirm who is paying the broker, update listings and lease forms to disclose every tenant-paid fee, and avoid new “fees” that could be treated as a disguised broker fee. Many owners now build the cost of leasing into rent or negotiate lower commissions with their brokers.
What About Broker Commissions When Buying or Selling?
The FARE Act applies to residential rentals, not sales. In a NYC sale, the seller customarily pays the listing broker’s commission from the proceeds, and following national changes to real estate commission practices in 2024, buyers now sign written agreements with their own brokers that spell out how the buyer’s broker is paid. See who pays closing costs in New York.
Landlord or tenant with a broker fee question? Our NYC real estate attorneys advise landlords on FARE Act compliance and review lease and brokerage agreements.
Frequently Asked Questions
Do tenants still pay broker fees in NYC?
Not to a broker who represents the landlord. Since June 11, 2025, the FARE Act requires the party who hires the broker to pay. A tenant who hires their own broker still pays that broker.
When did the NYC broker fee law take effect?
The FARE Act (Local Law 119 of 2024) took effect on June 11, 2025. A federal court refused to block it, and in July 2026 the Second Circuit upheld the law, rejecting the real estate industry’s First Amendment and Contracts Clause challenges.
Can a landlord charge other fees instead of a broker fee?
Landlords must disclose all tenant-paid fees in the listing and lease. Fees that are really broker fees under another name are treated as violations, and state law separately caps security deposits at one month’s rent and application fees at $20.
How do I report an illegal broker fee in NYC?
File a complaint with the NYC Department of Consumer and Worker Protection online or by calling 311, and keep copies of the listing, messages and receipts. The agency can impose penalties and seek refunds.
Does the FARE Act apply to buying an apartment?
No. It covers residential rentals. In sales, the seller customarily pays the listing broker, and buyers sign written agreements with their own brokers about compensation.
Questions About the FARE Act?
Our real estate attorneys advise NYC landlords and tenants on broker fees, leases and compliance. Schedule a free consultation.
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