Real Estate
A new law affecting the New York City rental market went into effect on June 11, 2025, and it’s something both renters and property owners should be aware of. Known as the FARE Act, the legislation now prohibits landlords and their brokers from charging broker fees to tenants. This marks a significant change from the way rentals have traditionally been handled in the city.
Previously, it was common for tenants to pay a broker fee–even in cases where they had no direct relationship with the broker handling the listing. These fees often amounted to a percentage of the annual rent, typically paid upfront at lease signing. Under the new law, those fees can no longer be passed to the tenant. If a landlord chooses to use a broker to lease out a property, the cost of that service is now expected to be covered by the landlord.
Since the law was implemented, the rental market has started to shift. In some cases, landlords have responded by adjusting rental pricing to reflect the change in cost structure. Listings may reflect these adjustments as the market recalibrates. It’s also not uncommon to see some properties temporarily removed from the market as owners and agents review their approach under the new regulations.
For tenants, one immediate impact is a lower upfront cost when signing a lease. The absence of a broker fee can significantly reduce the total amount due at lease signing, which may make moving more accessible to some renters. For landlords, the change may affect how marketing and leasing strategies are structured, particularly when it comes to deciding whether to work with a broker or to handle leasing in-house.
From a business standpoint, it’s important for all parties to be aware of the new requirements and understand who is responsible for what. Brokers working on behalf of landlords should ensure that any associated costs are clearly outlined and compliant with the new rules. Tenants, for their part, should read listings and lease agreements carefully and ask questions where necessary, just as they would with any legal or financial commitment.
This is a structural change in how rentals are handled in New York City, and as with any adjustment, it may take time for the market to fully adapt. What’s important now is clarity and communication. Whether you’re a renter, a landlord, or a professional in the field, understanding the FARE Act and how it affects your role in a transaction is key to navigating this new chapter in the city’s housing landscape.
Eddie Tolmasov, Broker/Owner, Gateway Homes Realty Inc., 646-468-6787
By Eddie Tolmasov