NYC Bans Broker Fees for Renters: What It Means for the Market

New York City’s housing landscape has shifted again with the passing of new legislation banning most broker fees for renters. Under the Fairness in Apartment Rental Expenses (FARE) Act, tenants will no longer be required to pay a broker fee when the landlord hires the broker. The change, effective June 2025, redefines how leasing costs are shared between renters, landlords, and agents across the city.

At Decode Real Estate, we view this as one of the most impactful regulatory changes in recent years. The shift will influence leasing dynamics, rental pricing, and how landlords market their units in a city where transparency and affordability are now at the forefront of renter expectations.

Understanding the New Broker Fee Ban

For decades, it was standard practice in New York for tenants to pay a broker fee — even when that broker represented the landlord. The cost, often equivalent to 12–15% of annual rent, could add thousands of dollars to a renter’s move-in expenses.

The new law completely changes that model. If a broker works for the landlord, the landlord must now pay that fee. Tenants will only be responsible for broker fees when they hire an agent to represent them directly.

The policy aims to make housing access more equitable by lowering the financial barriers to renting an apartment. It also requires full fee disclosure in listings, increasing transparency in an industry where hidden costs have long frustrated renters.

Key Details of the Law

• Who Pays: If a broker is engaged by the landlord, the landlord pays the commission.

• Disclosure Requirements: All listings must clearly state any fees that apply, ensuring tenants know total move-in costs upfront.

• Enforcement: The Department of Consumer and Worker Protection (DCWP) will oversee compliance, with fines of up to $2,000 per violation.

This legislation represents a rebalancing of financial responsibility in NYC’s rental market, shifting costs away from tenants and redefining standard leasing practices.

Impact on Renters, Landlords, and Brokers

The new rule affects every corner of the city’s real estate ecosystem. Renters benefit from reduced upfront costs, while landlords and brokers must adapt to a new cost structure that alters long-standing norms.

For renters, the most immediate advantage is affordability. Eliminating forced broker fees reduces move-in expenses by several thousand dollars, opening the market to a broader pool of qualified tenants. In a city where affordability defines access, this can dramatically increase mobility and rental turnover.

For landlords, the financial implications are mixed. Paying a broker fee per leased unit increases short-term costs but may accelerate leasing velocity. Many property owners will likely offset this by modestly raising monthly rents, a trend already visible in early lease renewals.

For brokers, the law reshapes client relationships. Those representing landlords will now depend on owner commissions rather than tenant-paid fees. Independent brokers who cater to renters may still charge a fee, but only when the tenant directly engages their services.

Decode Real Estate Market Insight

• Rent Growth: Landlords may recapture some costs by adjusting rent slightly upward over the lease term.

• Market Transparency: Renters can now compare properties more easily without the distortion of large upfront fees.

• Broker Role Evolution: Agents must redefine their value through service quality, expertise, and strategic guidance rather than access alone.

Decode Real Estate anticipates that, while short-term leasing costs may rise for property owners, the long-term effect will be a healthier, more transparent rental ecosystem.

The Larger Market Implications

The FARE Act doesn’t just alter transactional costs; it changes the psychology of renting in New York. Lower move-in costs could encourage more frequent tenant turnover, supporting market liquidity and benefiting well-managed properties.

Landlords who adapt early by advertising “no broker fee” apartments are likely to attract stronger tenant demand. This increased attention may offset the cost burden by accelerating leasing cycles and reducing vacancy rates.

For investors, the shift highlights the importance of understanding how regulation intersects with return on investment. A building’s leasing efficiency, pricing strategy, and management model are now as important as its physical asset quality.

What Decode Real Estate Recommends

• For Renters: Verify whether your broker works for you or the landlord. If the latter, you should not be charged a fee.

• For Landlords: Reevaluate your leasing budget to include broker commissions where applicable. Consider pricing adjustments that maintain competitiveness without reducing yield.

• For Investors: Monitor how the regulation influences demand patterns in your building or neighborhood. Transparency-driven shifts often bring long-term market stability and broader buyer appeal.

At Decode Real Estate, we see this legislation as an evolution toward fairness and clarity. It encourages professionalism and forces the industry to focus on value rather than cost transfer.

NYC’s Rental Market After the Fee Ban

The NYC broker fee ban marks a significant step toward reshaping how real estate operates in one of the world’s most competitive housing markets. It aligns with broader national trends that prioritize transparency, consumer protection, and affordability.

Over time, this law could influence other major U.S. cities to reconsider their own fee structures. In New York, however, the impact will be immediate setting a new standard for how properties are marketed and how renters engage with agents.

Decode Real Estate continues to guide clients through these evolving dynamics, offering strategies for both renters and landlords navigating this new regulatory environment.

To learn more about how the 1 Wall Street Building, 80 Clarkson, and other developments may be influenced by market changes, visit decodenyc.com.