The FARE Act - What Does it Mean for Renters?

As of June 11, the FARE Act changed how apartment rentals are handled in New York City. Traditionally, an agent working on behalf of a landlord (either exclusively or by way of advertising an open listing) would collect their fee from the tenant.

Under the FARE Act, if a landlord hires an agent, they pay the agent. An agent working for a landlord can no longer collect a fee from the tenant under any circumstance, and must provide a full Fee Disclosure to the tenant prior to signing a lease. These include items like application fees, credit check fees, move-in fees and deposits, and the like.

The rule doesn't just apply to commercial landlords. If you hire an agent to sublet your co-op or condo for you, you'll also be responsible for their compensation. The agent must make the same full Fee Disclosure.

This doesn't mean tenants must work without representation. Tenants are still free to hire and work with agents on their own behalf. They are also responsible for paying them.

It will be interesting to see how this ends up affect rent prices. Right now, with rental inventory tight, I suspect most landlords will continue to shift at least some of the cost to tenants; albeit in the form of higher rents rather than tenant-paid broker fees.