On June 11, 2025, the Fairness in Apartment Rental Expenses (FARE) Act, also known as Local Law 119 of 2024, took effect for NYC rental transactions. Whether you're a tenant, broker, or landlord, it's essential to understand your rights and responsibilities under the new law.
What Is the FARE Act?
The FARE Act, a pivotal piece of legislation, fundamentally alters the rental process in NYC. It bars landlords from requiring tenants to pay fees to brokers who represent them, thereby reducing upfront rental costs and enhancing transparency.
Whoever hires the broker pays the broker.
Key Changes Under the FARE Act:
1. Broker Fee Restrictions
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Under the FARE Act, a significant change is the prohibition of landlords' brokers from charging tenants a fee, including listing agents acting on behalf of the landlord. This ensures that landlords cannot mandate tenants to hire a specific broker or dual agent.
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Landlords cannot require tenants to hire a specific broker or dual agent.
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Tenants are still free to hire their broker and negotiate a separate compensation agreement.
2. Permitted Broker Compensation Models
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A tenant may pay their broker.
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A landlord may pay their broker.
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A landlord may pay a tenant’s broker.
Mandatory Fee Disclosures
All rental advertisements must:
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Disclose all fees a tenant must pay to rent the apartment.
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Exclude unlawful broker fees.
Before lease signing, landlords (or their agents) must:
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Provide a written itemized disclosure of all rental-related fees.
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Include short descriptions for each fee (e.g., key replacement, pet fees).
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Ensure the document is signed by the tenant and retained for a period of three years.
Enforcement and Penalties
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The Department of Consumer and Worker Protection (DCWP) will oversee compliance and issue fines.
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Violations can result in penalties of up to $2,000 per incident.
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Tenants may also sue landlords or brokers for non-compliance under the law’s private cause of action provision.
Listing Protocols and RLS Guidance
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Brokers must obtain explicit permission from the landlord before publishing rental listings, as doing so implies that they have the landlord's authorization.
Final Thoughts:
Rental costs in NYC have skyrocketed over the last couple of years due to limited inventory, ever-changing rental laws that tighten control on the rental market, and the limited construction of new homes. It’s not solely due to broker fees.
Overall, I think the FARE Act may temporarily increase rental prices because, in the past, rentals considered "No fee" already included the broker fee in the price. I also foresee brokers or landlords removing their listings from search portals such as StreetEasy, which will make it harder for consumers to find homes.
It could also lead to tenants having no representation, thereby opening the door to more fraud, and result in tenants paying higher upfront costs, especially those who are unaware of the process.
As a broker myself, I agree that whoever hires someone should pay, but I also believe that government involvement isn’t necessary. It should be a free market where negotiations happen among the landlord, broker, and tenants for the respective unit.
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