No More Broker Fees For NYC Renters

Manhattan skyline on a sunny day Empire State Building on the right, New York, United States

New Yorkers are constantly stressed with the idea of the 3-week period they have to lock down their perfect apartment. It is crazy competitive getting the perfect place, within their budget, but there's always one thing we try and avoid....a broker's fee.

Brokers could collect fees as much as 15 percent of the annual lease, which is usually paid before the renters can even move in. However, late Tuesday, New York State effectively eliminated them. New York is one of many few cities where a 'broker industry' has a huge financial leverage on people renting apartments.

Brokers can still collect a fee, but according to revised rules, it must be paid by the landlord unless a tenant hired them to help find an apartment.

According to the NYTimes, the rule was buried in a legal guidance on last year’s rent laws, which caught lawmakers, landlords and brokers totally off guard.

“This is a dire issue with our members, so we are literally going through every single avenue,” said Reggie Thomas, the president of The Real Estate Board of New York's senior vice president for government affairs. “It’s an all-hands on deck thing because this came out of left field.”

However, brokers warn that the new rules may just increase what tenants pay in monthly rent, since many landlords will take the brokers fee cost and tack it onto their residents in higher rent.

Photo: Getty

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