A new regulation in the city that prohibits broker fees will take effect tomorrow, following a federal judge’s decision to dismiss a lawsuit from real estate lobbyists aimed at blocking it.
Judge Ronnie Abrams ruled on Tuesday that the federal lawsuit questioning the fairness of the apartment rental cost law was based more on policy disagreements than on constitutional issues.
“The plaintiffs’ concerns about this law stem from their fundamental disagreement with its underlying policy, not from any impact on constitutional rights,” Abrams stated.
She dismissed most claims in the lawsuit, rejecting any request to pause the law while the lawsuit was underway.
This fare law, which the city council passed on November 13 with a majority of 42-8, stops property owners from charging future tenants a “broker fee.”
The lawsuit was filed a month later by the New York Real Estate Board, the Brokers Association, and several other real estate entities, who argued that banning broker fees would “destroy” the rental market.
Abrams commented that the lawsuit “seeks to act as ‘super-regislators’.”
“The court will decline that invitation,” she wrote, emphasizing that any changes should come from the political process rather than the courts.
She acknowledged that the law might lead to higher costs for landlords, suggesting they could offset these by raising rents.
“Tenants, on the other hand, can’t pass those broker fee costs onto landlords,” she noted.
President of the Real Estate Board, James Whelan, expressed disappointment over the denial of their request to suspend the law.
“New Yorkers will soon see the negative effects of this law with fewer options and increasing rents. We will persist in our legal efforts and consider an appeal.”
