NYC Broker Fees and the FARE Act

A broker fee is the commission a real estate broker earns for finding or showing an apartment, historically one month's rent or more. Since June 11, 2025, New York City's Fairness in Apartment Rental Expenses (FARE) Act means the person who hires the broker pays for it. If your landlord's agent listed the apartment, that agent cannot bill you, no matter how the listing is worded. You only owe a broker fee if you hired your own broker to help with the search.

Before you tour anything, check the building's record on Building Health X so a fee dispute is not the only thing you are vetting before you sign.

What Changed Under the FARE Act

The FARE Act, formally Local Law 119 of 2024, took effect June 11, 2025 and is enforced by the Department of Consumer and Worker Protection (DCWP). The rule is simple to state: whoever retains a broker owes that broker's fee. A landlord who hires an agent to market and show a unit, including an agent who lists the apartment with the landlord's permission, has to pay that agent directly. That holds even if a lease was signed before June 11, 2025. If the fee was not already paid by that date, it cannot be collected afterward.

The FARE Act did not ban brokers or their commissions, and it did not cap what a broker can charge. It moved the bill to whichever party decided to hire one. A landlord who wants an agent's help marketing and showing a unit can still get it. The landlord cannot pass that cost on to the person renting the apartment.

Which Fees a Landlord Can and Cannot Charge You

Fees That Are Now Off Limits

A broker who represents the landlord, or who lists a unit with the landlord's authorization, cannot charge you a fee for that work. That includes fees dressed up as an "application processing" or "move-in coordination" charge if the substance of the work is brokering the rental. If a listing agent tells you the fee is required to "submit your application," treat that as the exact kind of workaround the law was written to stop.

Fees You Can Still Be Charged

A landlord can still charge you for a background check and credit check, but the combined fee is capped under Real Property Law 238-a at whichever is lower: the actual cost of the checks or $20. The landlord has to give you a copy of the report and the receipt or invoice from the company that ran it, and has to waive the fee entirely if you supply a background or credit check from the last 30 days. A security deposit and the first month's rent are separate from any of this and are not affected by the FARE Act.

If you hire your own broker to represent you in the search, rather than working off a landlord's listing, you can agree to pay that broker directly. That is the one scenario where a tenant-paid fee is still legal.

The Disclosure You Should See Before You Tour

Landlords and their agents have to give you a written, itemized disclosure of every fee you will owe before you sign a lease, and advertisements have to state fees clearly rather than burying them. You have to sign that disclosure before the lease is executed, and the landlord has to keep a copy of it for three years. If nobody hands you an itemized list of fees before you are asked to pay anything, ask for one in writing before you go further.

How to Avoid Paying a Broker Fee

• Ask upfront who hired the broker. If the landlord did, the fee is the landlord's to pay under the FARE Act, full stop.
• Get the itemized disclosure before you commit to anything. A landlord who will not produce one before you tour is a sign to slow down.
• Treat any fee framed as required for your application to be "processed" or "considered" with suspicion unless it is specifically the capped background or credit check fee, with the report and receipt to back it up.
• Keep records of every listing, text and receipt from the start of your search, since that documentation is what DCWP asks for if you end up filing a complaint.

Some brokers try to work around the law with broker fee scams and fake listings instead, so keep an eye out for those while you are still touring, before money changes hands.

If You Are Charged Anyway

Report an illegal fee through DCWP's online consumer complaint portal, and bring whatever evidence you have: texts, screenshots of the listing, receipts and the broker's contact information. DCWP investigates and can bring the matter to a hearing at the Office of Administrative Trials and Hearings. The civil penalty schedule is tiered: $750 for a first violation, $1,800 for a second, and $2,000 for a third violation and beyond, and DCWP can also order the broker or landlord to pay back any illegal fee already collected. You do not have to wait on DCWP either. You can sue in civil court on your own to recover an illegally charged fee.

In the law's first year, DCWP issued 74 summonses and collected about $27,000 in penalties from 33 brokers, so this is not a rule that exists only on paper. If you are charged a fee you believe the law prohibits, filing a complaint puts your case into an enforcement pipeline that has already produced real fines. Keep a copy of your complaint confirmation and any reference number DCWP gives you, since it is what you will need if you decide to follow up or escalate to a private lawsuit later.

Legal Challenge to the FARE Act

The Real Estate Board of New York, along with the New York State Association of Realtors and individual brokers and owners, sued to block the FARE Act, arguing it violated free speech and preempted state law. A federal judge, Ronnie Abrams, denied their request to halt the law and dismissed several of their claims on June 10, 2025, the day before the law took effect. REBNY appealed to the Second Circuit, and the FARE Act has been in force since June 11, 2025.

One year in, the law has not driven the sharp rent increases critics warned about. StreetEasy's data through May 2026 found broker-represented units that used to charge tenants a fee saw asking rents rise about 1.1% because of the law, roughly $38 a month, against a citywide 7.3% year-over-year jump in median asking rent that analysts tie mainly to New York's housing supply shortage rather than the fee shift. Before the law, according to the Community Service Society, first month's rent, a security deposit and a broker's fee on a median vacant apartment could run close to $13,680 all at once, an amount most renters could not have covered from savings. Full details on what is and is not allowed are in DCWP's FARE Act guidance.

Before you sign anything, run through what to check before signing an NYC lease. Once you have a place, get renters insurance and your utilities lined up during the first week after you sign, so move-in day is not the first time you deal with them.

Frequently Asked Questions

Who Pays the Broker Fee in NYC Now?

Whoever hired the broker. If your landlord hired the agent who listed or showed you the apartment, the landlord pays that agent. You only pay a broker fee if you separately hired your own broker to help with your search.

Can a Landlord Still Charge Me an Application Fee?

Only for a background and credit check, and only up to the actual cost of those checks or $20, whichever is lower. The landlord has to give you the report and the receipt, and has to waive the fee if you already have a report from the past 30 days.

Is the FARE Act Still in Effect After the REBNY Lawsuit?

Yes. A federal judge declined to block the law in June 2025, and a Second Circuit panel later declined to pause it while REBNY's appeal continues. The law has applied without interruption since June 11, 2025.

What Do I Do if a Broker Tries to Charge Me a Fee Anyway?

Save every text, listing screenshot and receipt, then file a complaint through DCWP's online portal. DCWP can fine the broker or landlord and order any illegal fee refunded, and you can also sue in civil court to get the money back yourself.

Does the FARE Act Apply to Leases I Signed Before June 2025?

Yes, in one specific way. If a broker fee from an older lease was never paid, it cannot be collected from you now, even if the lease itself predates the law.

How Much Did Broker Fees Used to Cost in NYC?

Fees commonly ran a full month's rent or more, which on a typical vacant apartment could add thousands of dollars to the cash needed at signing on top of the first month's rent and security deposit.