New York City gets rid of broker fees for renters
In an unexpected move, New York City has eliminated broker fees for renters.
Up until now, real estate brokers in Manhattan and the outer boroughs have been able to charge renters a fee of up to 15 percent of the annual rent on apartments they represent. According to the New York Times, the new rule means landlords will now have to foot that bill unless the tenant hired the broker.
But typically, even public listings on sites like StreetEasy or even Craig's List will have a broker attached. According to the New York Post, about 45 percent of StreetEasy rental listings last year included a broker’s fee.
This new rule may mean that New York City, one of the few cities that charges a fee to rent an apartment, could become more affordable for renters. But, The New York Times writes that "brokers warned that the new rules would simply increase what tenants pay in monthly rent, since many landlords will likely pass on the cost of a broker’s fee to their residents in higher rent"
"The new rule, buried in a legal guidance on last year’s rent laws, caught lawmakers, many landlords and brokers off guard. The Real Estate Board of New York, the influential trade group, immediately threatened to challenge the rule in court and urged its members to protest," the paper reports.
The new law went into effect January 5, 2020.