Landlords Navigating the FARE Act: Listing Apartments in NYC

On June 11, a quiet yet consequential shift will occur in New York City’s rental market. Implementing the Fairness in Apartment Rental Expenses (FARE) Act will officially lift a longstanding cost burden, often surprising to newcomers: broker fees.

Under the new law, broker fees must be paid by the party that hires the broker, typically the landlord, not the tenant. In a city where broker fees routinely run 12 to 15 percent of annual rent (for a $3,000-per-month apartment, $5,400), the change promises relief for renters long frustrated by the sticker shock of moving costs.

But while tenants may celebrate, landlords now face a new set of financial and procedural challenges. Many, notably smaller property owners, are recalibrating how they list, market, and lease apartments under the new rules.

A Fork in the Road: Broker or No Broker?

For landlords, the first decision is whether to use a broker.

Those opting to list independently can avoid fees by handling everything from advertising to tenant screening. Popular platforms like StreetEasy, Zillow, and RentHop allow landlords to post directly, and with renters increasingly searching online, the reach is substantial.

“There’s real opportunity here for landlords to cut out the middleman,” said one Brooklyn-based landlord who plans to go broker-free. “But it’s a lot of work.”

Indeed, the trade-off is time. Managing listings, coordinating showings, and verifying tenants requires a level of involvement some property owners, particularly those with multiple units, may not be willing or able to provide.

Hiring a broker, however, now comes with a price tag. The FARE Act prohibits landlords from passing along those fees to tenants, even in cases where the broker posts the listing on the landlord’s behalf. As a result, landlords must either absorb the cost or negotiate for more budget-conscious brokerage models.

Industry insiders expect the law to spur increased competition among brokers. Some offer flat-fee or discounted packages to appeal to landlords navigating this new terrain.

Fair Housing Responsibilities Still Apply

Landlords taking on these responsibilities must also ensure compliance with local, state, and federal fair housing laws. That includes avoiding discriminatory language in listings, offering all prospective tenants equal access to viewings, and applying consistent criteria when screening applicants.

Violations can lead to serious legal and financial consequences, including investigations by the New York City Commission on Human Rights or the U.S. Department of Housing and Urban Development (HUD).

Whether you’re a licensed broker or a private landlord, the law doesn’t change. Fair housing rules apply to everyone.

A New Era of Transparency

Beyond broker fees, the FARE Act introduces strict requirements for fee disclosure. Any upfront costs tenants must pay, such as application fees, background checks, and credit screenings, must be clearly outlined in both listings and lease agreements. An itemized disclosure must be presented before the lease is signed and retained by landlords for at least three years.

“This is a transparency law as much as it is a cost-shifting one,” said a spokesperson for the city’s Department of Consumer and Worker Protection (DCWP), the agency charged with enforcement.

Experts recommend using explicit, plain-language disclosures. For instance, landlords might write, “No broker fee; $20 application fee,” directly in the listing to avoid confusion.

Defining Broker Relationships

The FARE Act also scrutinizes the relationships between landlords, tenants, and brokers. Landlords must clarify whether a broker is acting on their behalf, the tenant’s, or both to themselves and prospective tenants.

If the broker is working for the landlord, the landlord pays. If a tenant independently hires a broker to help them search, the tenant may still pay, though landlords cannot require the use of a broker as a condition of renting.

Dual agency, where a broker represents both parties, is permitted only with informed consent from the landlord and the tenant.

Legal professionals urge landlords to formalize broker agreements in writing to avoid disputes. The agreements should identify who hired the broker and who is responsible for payment.

Market Shifts: The “No-Fee” Advantage

The FARE Act’s implications extend beyond compliance. Many industry analysts believe it may shift pricing dynamics in the city’s competitive rental market.

Historically, listings marked “no-fee” have commanded higher rents from 3 to 12 percent more, depending on the borough. Landlords covering broker costs may attempt to offset the expense by raising rents. Still, those with rent-stabilized units (roughly 47 percent of the city’s rentals) will have limited flexibility due to strict rent increase regulations.

Still, offering “no-fee” units may provide a competitive edge. In a city where the average upfront cost to rent an apartment, including the first month’s rent, security deposit, and broker fee, can exceed $12,000, lowering entry costs will likely attract more applicants.

Compliance and Enforcement

The Department of Consumer and Worker Protection (DCWP) will oversee compliance with the FARE Act. Violations are subject to fines and potential legal consequences:

• Broker fee violations (i.e., charging a tenant for a broker hired by the landlord): $1,000 for the first offense, $2,000 for repeat violations within two years.
• Disclosure violations (i.e., failing to provide clear, itemized fee disclosures): $500 for the first offense, $1,000 for subsequent violations.

Landlords are encouraged to retain all documentation, broker agreements, fee disclosures, and lease correspondence for at least three years. Legal challenges to the FARE Act, including potential lawsuits by the Real Estate Board of New York (REBNY), may alter enforcement timelines, so staying informed is essential.

Tech-Driven Solutions and Strategic Marketing

As the rental landscape evolves, many landlords are embracing technology to adapt. High-quality photos, virtual tours, and digital applications allow direct-to-tenant marketing without broker involvement. These tools offer compliance and cost-saving potential, particularly for smaller landlords.

Emphasizing “no-fee” status in listings is expected to become a key marketing strategy. Combining competitive rents and streamlined online processes may enhance visibility and tenant interest.

A Practical Playbook for Landlords

To navigate the FARE Act smoothly, landlords should consider the following steps:

• Evaluate Needs: Decide whether to use a broker or manage the process independently.
• Choose Brokers Strategically: If hiring, seek competitive or flat-fee models.
• Disclose Clearly: Provide all tenant-paid fees in writing before lease signing.
• Clarify Broker Roles: Document who hired the broker and who pays the fee.
• Market Smartly: Highlight “no-fee” status and use online tools to attract tenants.
• Stay Current: Monitor legal developments and consult counsel when needed.

The Bottom Line

The FARE Act is a welcome change for renters, promising lower upfront costs and clearer information. For landlords, it introduces new obligations and an opportunity to build trust and appeal to an increasingly savvy renter base.

The rules may shift, but one constant remains: Clarity is currency in New York City’s high-stakes housing market.