If you are not a broker, do not modify it.
Big Apple real estate agents are suing the city over a new law that forces tenants to pay higher brokerage fees, but the lawsuit could prevent the law from taking effect this summer as planned.
The Real Estate Board of New York (REBNY) and other groups representing brokers and landlords filed a lawsuit Monday to block a controversial bill called the Apartment Rental Fairness Act (FARE) that passed with a veto in the City Council. I woke you up. On November 13th, a 42-8 majority was certified.
“While the Fare Act may have 'good intentions,' it has wreaked havoc on New York City's rental market, with numerous unintended consequences and immediate and reversible consequences for the consumers and agents it purports to protect.” “This would cause irreparable harm to landowners across the city,” the lawsuit charges.
The law requires the person hiring the agent, not the prospective tenant, to pay the fee.
Supporters hope the bill will ease the city's housing affordability crisis, but opponents say it could actually lead to higher rents.
The law is scheduled to go into effect next July, 180 days after City Council approval, but a lawsuit in Manhattan federal court could halt the law until further notice, experts said.
“However, [real estate] The industry has a heavy burden in court…they [brokers] The benefit is for the industry, so give it a shot,” David Schwartz, a New York City trial lawyer and lobbyist, told the Post, adding that a judge could block the law from taking effect.
“This law is another attempt by local governments to micromanage the freedom of parties to enter into contracts, and it violates the Contract Clause and the First Amendment, and is preempted by state law. ” Schwartz added.
But Altagracia Pierre Outerbridge, a lawyer who specializes in landlord-tenant litigation, said arguing the case is a “long game” and “an uphill battle with City Hall.”
To stop the law from taking effect, REBNY's lawyers would have to prove that it would cause irreparable harm to brokers, she said.
“The challenge of First Amendment speech restrictions must overcome the fact that the law does not seek to suppress any views or ideas, nor does it seek to force brokers to express ideas. ” said Pierre Outerbridge. Brokers like the part of the City Human Rights Act that outlaws certain discrimination in real estate. ”
“The final argument is that the government should not be allowed to pass laws canceling contracts,” Pierre-Outerbridge added. Not written yet. ”
The city expects to respond to the lawsuit within approximately 20 days.
Carl Hamm, REBNY's attorney and senior vice president, denounced the fare law as “bad policy and bad law.”
“Not only does this law raise rents and make it harder for tenants to find housing, it also violates our constitutional rights to free speech and contract.” – Agents and landlords It would prohibit people from listing rental properties online without hiring someone, Hamm said. he told the Post.
Mayor Eric Adams did not veto or sign the bill by Friday's deadline, automatically making it law, but he has previously expressed skepticism about the fare law and said property owners should not It suggested that the cost of hiring a contractor could simply be passed on to the tenant under the lease.
New York City is one of the few cities where landlords can hire agents to pass on the hiring costs to renters, and a recent analysis found that some of the hefty upfront costs have increased to an average of $1,000,000 on average this year. It has reached $3000. Rental site StreetEasy.
The bill's sponsor, Brooklyn City Councilman Chi Ose, previously said of the bill, “This bill is common sense.” “It’s replicating how every other trade exists in this country.”
