New York City Rental Law Changes Expected to Lower Costs

If things go as planned with New York City’s new rental regulations, residents could find themselves paying significantly less for apartment rentals.

Unless there’s a surprising decision from the judge, the Fairness in Apartment Rental Costs Act is set to take effect on Wednesday.

This new law eliminates the responsibility of tenants to cover broker fees.

Now, landlords will have to handle these costs unless a tenant specifically hires a broker to assist in their apartment search.

Reactions from Brokers on the New Laws

“There’s been a lot of discussion around this issue. As a broker, it’s fantastic that tenants won’t be charged a commission from the landlord,” said Sonia I. Christian Bent, a broker with Berkshire Hathaway Homeservices New York Properties. “I think it’s a positive change for both parties.”

She mentioned that even wealthier clients found the broker fees quite frustrating.

“In my last two rental agreements, the landlords I represented preferred this new approach,” Bent commented. “It made leasing their units simpler and drew in qualified applicants who are willing to pay high rents but are relieved they don’t have to manage extra broker fees.”

Despite this, Bent believes landlords will likely keep rents stable without increasing them to recoup lost fees. “They need to remain competitive,” she added.

On the other hand, Keyan Sanai, a top agent at Douglas Elliman, expresses skepticism about this shift.

He argues that tenants might end up paying more over time—not just a one-time fee—because landlords often increase rent initially to compensate for the fees, and those higher rates tend to persist.

“If you stay in an apartment for over a year, you’re probably shelling out more than what a broker’s fee would have been,” he suggested.

He also raised a question about whether landlords might avoid raising rents for a year to recover expenses. “But it’s the landlords we’re discussing,” he added.

Moreover, Sanai pointed out that increasing rents impacts all renters, although they represent only about half of the rental market. “Living in high-demand areas like West Village may still involve broker fees, while spots like Hudson Yards might not,” he noted.

He wrapped up his thoughts by saying, “This law could be a short-term win but might lead to long-term challenges.”

Danielle Nazinitsky, founder and CEO of Decode the Real Estate, shared similar concerns, suggesting that the fallout from this law won’t benefit everyone.

“For landlords, they’re facing new fixed costs in a market with declining values and rising expenses like taxes and insurance,” she explained.

“For real estate agents and brokerages, this will result in narrower profit margins, which could lead to an influx of lower-quality agents. And for tenants, the broker fee issue isn’t likely to disappear,” she stressed.

Cost of Broker Fees for Tenants

Broker fees impacted about half of the 2.3 million apartments in New York City, including rent-stabilized units.

Elizabeth Gyori, a nonprofit lawyer, recalled that when apartment hunting in Brooklyn, she and her partner spent roughly $4,000 on broker fees, which accounted for about 12% of their annual rent.

“We could have utilized that money in so many other ways,” Gyori shared. “It’s unfortunate that we can’t capitalize on the new laws ourselves, but it’s great for others.”

Looking Ahead for NYC Renters

The ultimate outcome of the new law depends on a judge overseeing cases brought by the New York Real Estate Board and various brokerages, although the board is optimistic about a transition.

According to the new law, brokers cannot charge tenants fees related to rental transactions, unless a tenant hires a broker specifically, in which case the landlord can cover the broker’s expenses.

Additionally, rental listings will now have to clearly outline all potential fees that tenants might incur, such as those for lost keys or pets, as well as first and last month deposits.

Violators of this new legal framework may face fines of up to $2,000 enforced by the newly established NYC Consumer and Workers’ Protection Agency, with complaints processed through 311.