Opposition Sparked by City Council’s Proposed Broker Fee Bill
New York City is one of the few places in the U.S. “where renters have to pay for a service provided to landlords.” However, a bill proposed in 2023 by City Councilmember Chi Ossé would “require whoever hired a broker to pay for their fees if passed.” The proposed Fairness in Apartment Rental Expenses Act (FARE Act), more commonly known as the “Broker Fee Bill” sparked opposition from the Real Estate Board of New York (REBNY), claiming that the legislation “would create a wide range of negative outcomes” according to the June 12th press release by the real estate trade association. In contrast, an interview with a 20-year veteran residential broker published in Curbed on June 5th delivered a more favorable response to the bill. Pointing out that in theory the current practice of the tenant paying a “fee to the broker for arranging the rental transaction on behalf of the landlord” to lease an apartment is “completely opposite to anything else done in real estate,” but since the practice has permeated New York City for decades, it has just become the accepted norm. The possibility exists that the passage of the bill could “actually make the system work better for everyone as well as adding greater transparency at this point. However, in the example of smaller property owners, while it is possible that market rate owners will continue to hire brokers to take advantage of their expertise, those in opposition of the “Broker Fee Bill” have a justified concern regarding smaller rent-stabilized landlords that must adhere to tighter rent regulations that make it more difficult to offset the broker fee costs.
Source: https://www.rebny.com/press-release/1-500-agents-rally-at-city-hall-to-oppose-broker-fee-bill/
Source: https://www.curbed.com/2024/06/chi-osse-broker-bill-interview.html