The short version
New York City's Fairness in Apartment Rental Expenses Act, commonly called the FARE Act, changes who may be required to pay certain residential rental broker fees. In practical terms, a broker hired by a landlord cannot simply shift that broker's fee to the tenant. Required fee disclosures also matter. The FARE Act took effect June 11, 2025, and NYC's Department of Consumer and Worker Protection (accessed 2026-08-01) confirms that whoever hires a broker - not the other party to the lease - is responsible for that broker's fee.
Real estate industry groups sued to block the law on First Amendment and state-preemption grounds. As of August 2026, that challenge has failed at every stage reviewed so far: a federal district court declined to enjoin the law in June 2025, and the U.S. Court of Appeals for the Second Circuit affirmed that dismissal in July 2026 (accessed 2026-08-01), rejecting the constitutional and preemption claims. The plaintiffs (led by the Real Estate Board of New York) have said they intend to pursue further review. The rule stated above - landlord-hired broker, landlord pays - is therefore the operative, currently enforced rule, but it remains the subject of active litigation and could be affected by a future ruling or legislative change.
This does not mean leasing a vacant apartment has become costless. Owners still need to evaluate placement fees, marketing, screening, their own time, and rent lost while the unit is empty.
Start with who engaged the broker
The central operational question is who retained or engaged the real estate agent. Owners should document their brokerage relationships clearly, make sure advertisements and communications accurately disclose required fees, and avoid language that could confuse a renter about whom the agent represents.
The law and its enforcement can evolve. Before relying on a particular fee structure, confirm current requirements with New York City official guidance and qualified legal counsel.
Vacancy is often the largest hidden leasing expense
At $4,000 in monthly rent, one vacant day represents about $131 in forgone rent using an average month of 365.25 ÷ 12 days. Fourteen additional days of vacancy therefore cost roughly $1,840 before advertising, photography, screening, or landlord time.
That is why owners should compare total lease-up cost rather than the placement fee alone:
- Estimate a realistic baseline vacancy period.
- Adjust timing for each leasing path only when evidence supports it.
- Add the owner's fee and direct expenses.
- Include the value of hands-on landlord time for a DIY process.
- Stress-test the result by changing timing a few days in either direction.
Use Botway's Rental Vacancy Cost Calculator to make that comparison with the same assumptions across DIY leasing, a traditional broker, a property manager, and Botway.
A useful decision rule
A placement service can be economically worthwhile when its fee is lower than the combined DIY costs plus the rent lost from extra vacancy. Converting every fee into “equivalent vacancy days” makes that tradeoff easier to see.
The lowest modeled total is not a guarantee. Tenant demand, pricing, property condition, seasonality, screening requirements, and execution all affect actual results.
Over a longer holding period, brokerage fees repeat. The Lifetime Brokerage Fee Savings Modeler models that recurring cost using canonical Botway pricing and your own editable traditional-fee assumptions.
Keep the compliance review separate
The calculator is an economic planning tool, not a legal conclusion. Have counsel review current FARE Act compliance, broker engagement documents, listing disclosures, fair housing practices, application procedures, and any fee charged in connection with the rental.
Botway does not provide legal, tax, accounting, or investment advice.
Sources
- "Fairness in Apartment Rental Expenses (FARE) Act - FAQ," NYC Department of Consumer and Worker Protection, https://www.nyc.gov/site/dca/about/FAQ-Broker-Fees.page, accessed 2026-08-01.
- "Renter Rights Regarding Broker Fees," NYC Department of Consumer and Worker Protection, https://www.nyc.gov/assets/dca/downloads/pdf/about/Renter-Rights-Regarding-Broker-Fees-English.pdf, accessed 2026-08-01 (secondary confirmation via search index; direct fetch returned an access error).
- "Court rejects REBNY's FARE Act appeal," Crain's New York Business, https://www.crainsnewyork.com/politics-policy/cny-rebny-fare-act-broker-fee-20260713/, accessed 2026-08-01.
- "FARE Act Now in Effect: What NYC Renters and Landlords Need to Know," Cole Schotz (law firm, secondary source), https://www.coleschotz.com/fare-act-now-in-effect-what-nyc-renters-and-landlords-need-to-know/, accessed 2026-08-01.
- "Landlords lose appeal challenging NYC broker fee ban," Courthouse News Service (secondary source), https://www.courthousenews.com/landlords-lose-appeal-challenging-nyc-broker-fee-ban/, accessed 2026-08-01.
This is general information, not legal, tax or accounting advice. Every situation is different. Talk to a licensed attorney, accountant or tax professional before you act.
List your rental free, or lease it for $1,000.
Run it yourself with this playbook, or let us handle the showings, screening and lease.