The FARE Act Explained: Who Pays the Broker Fee Now?

For decades, NYC renters paid a broker fee — typically one month's rent or 12%–15% of annual rent — to an agent they never hired, working for a landlord they'd never met. The Fairness in Apartment Rental Expenses (FARE) Act ended that. Here's the current state of the law.

The core rule

Whoever hires the broker pays the broker.

Passed by the City Council in November 2024 and effective June 11, 2025, the FARE Act prohibits a broker from charging a tenant a fee when that broker:

1. Published the listing for the apartment, or

2. Was otherwise hired by the landlord (including as the landlord's agent)

Publishing a listing is treated as a signal that the broker is working for the landlord. The Act also requires that all fees a tenant must pay be disclosed — in the listing and in the lease — so renters can see the true cost before applying.

Is it still in effect? Yes.

REBNY and allied plaintiffs sued in federal court, arguing First Amendment and state preemption grounds. They lost at the preliminary injunction stage, the law took effect on schedule, and on July 13, 2026 the U.S. Court of Appeals for the Second Circuit affirmed dismissal of the key claims. The FARE Act is settled, enforced law.

Enforcement is real but modest. The Department of Consumer and Worker Protection received thousands of complaints in the law's first year, issuing dozens of summonses, tens of thousands of dollars in penalties, and refunds to renters charged improperly. Complaints outpace recoveries, so renters should not assume a violation will self-correct — document and file.

When a renter still pays a fee

One situation: you hire the broker yourself. If you engage an agent to search on your behalf — touring buildings, finding off-market units, negotiating for you — and that agent didn't publish the listing or work for the landlord, you may agree to pay them. That's a service you chose, with a fee you negotiated.

Watch for the gray-area pitch: a broker who shows you a listing they published, then offers to "represent you" so they can charge you. If they published the listing or are the landlord's agent, the Act prohibits charging you regardless of what agreement they ask you to sign. If a broker frames it as "pay me once or pay a higher rent forever," treat that as a red flag and verify who published the listing.

What it means for renters

• Budget roughly $7,000 instead of $13,000 for a typical move at $3,500/month — first month plus a one-month deposit plus a capped $20 application fee.

• Read listings carefully. Tenant-payable fees must be disclosed. Unlisted surprise fees at signing are themselves a violation.

• Keep records. Screenshot the listing, save texts and emails, and get receipts. Complaints to DCWP go through 311 or their website.

• Condo and co-op move-in fees are separate and still payable — the FARE Act governs broker fees, not building charges.

What it means for landlords and owners renting out a unit

• If you hire a broker, you pay them. Budget it as a cost of leasing, and factor it into the rent you set and the lease term you prefer (longer terms spread the cost).

• Disclose every tenant-payable fee in the listing and the lease.

• Don't structure around it. Arrangements designed to shift your broker's fee onto the tenant invite DCWP penalties and restitution orders.

• Consider the economics of longer leases and renewal retention — turnover now costs you more than it used to.

The honest assessment of its effects

Two things are true simultaneously:

1. Renters' upfront costs fell substantially — on the order of $5,000 on an average move.

2. Asking rents rose modestly as landlords absorbed brokerage costs — StreetEasy attributed roughly a 1.1% average increase to the law.

For renters who move every year or two, the trade is clearly favorable. For very long-term tenants, the monthly increase eventually exceeds the one-time saving. Policy debates about the law continue; the legal question does not.

This article is for general informational purposes only and does not constitute legal advice. Whether a particular fee is lawful depends on the facts. Consult a tenant attorney or NYC DCWP. Sources: NYC Local Law 119 of 2024; Real Estate Board of New York, Inc. v. City of New York, 2d Cir. (decided July 13, 2026); NYC DCWP enforcement reporting. As of October 2026.

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