The FARE Act - Who Pays the Broker Fee in NYC Now
The Short Answer
Since June 11, 2025, New York City law says the person who hires the broker pays the broker. If a landlord puts a broker on their listing, the landlord owes that fee - not you. You only pay a broker fee when you choose to hire your own agent to represent you. Every fee a tenant is required to pay must now be written into the listing and the lease, up front. If a landlord or their agent tries to charge you for the landlord's broker - even under a different name - that's illegal, and you can report it to the city's Department of Consumer and Worker Protection (DCWP).
For a typical renter, this is the single biggest change to NYC's upfront costs in a generation. On a $3,500 apartment, the old "broker fee" was routinely 15% of the annual rent - about $6,300 - paid by the tenant for an agent who worked for the landlord. The FARE Act removes that charge from the tenant side of the ledger.
Why This Matters
For decades, NYC was an outlier: tenants regularly paid a month's rent or 15% of the annual rent to a broker they never chose, hired by the landlord to fill the landlord's vacancy. No other major US rental market worked this way at that scale. The fee inflated move-in costs by thousands of dollars and fell hardest on lower-income renters, who could least afford a four-figure surcharge on top of first month and a deposit.
The FARE Act realigns the cost with the relationship. The principle is the one that governs almost every other service in the economy: the party who engages a professional pays that professional. A landlord who hires a broker to market and lease a unit is buying a service for themselves, so the landlord bears the cost - just as a seller pays their own listing agent. A renter who hires a broker to hunt, vet, and negotiate on their behalf is buying a service for themselves, so the renter pays. The law doesn't ban broker fees; it bans making you pay for someone else's broker.
This also changes incentives. When landlords bear the marketing cost, they price and present units more efficiently, and the old game of padding a listing with a tenant-paid fee disappears. For a renter, the practical effect is a lower, more transparent move-in number and a listing market where the all-in cost is finally legible.
The Money Math
The savings are concrete. Compare the same $3,500/month apartment before and after the FARE Act, assuming a landlord-hired broker:
Before the FARE Act (tenant pays landlord's broker, 15% of annual rent):
- First month's rent: $3,500
- Security deposit (one month, HSTPA cap): $3,500
- Broker fee (15% × $42,000 annual): $6,300
- Move-in total: $13,300
After the FARE Act (landlord's broker is the landlord's cost):
- First month's rent: $3,500
- Security deposit (one month): $3,500
- Broker fee: $0
- Move-in total: $7,000
That's a $6,300 reduction - nearly halving the cash needed to move in. The deposit and first month don't change; the entire saving comes from removing the tenant-paid broker fee.
If you choose to hire your own broker, you'd add that agreed, disclosed fee back - but it's now a fee you opted into for representation that works for you, and it's negotiable like any service.
How People Get This Wrong
The most common error is assuming nothing changed. Renters who searched before June 2025, or who hear "it's NYC, there's always a broker fee," accept a tenant-paid fee on a landlord's listing without questioning it. The fee is so culturally embedded that people pay it reflexively.
A second trap is the relabeled fee. Some landlords and agents have tried to preserve the old revenue by renaming the broker fee - calling it an "amenity fee," "move-in fee," "administrative fee," or building it into a non-refundable charge at lease signing. The label doesn't matter; if it's compensation for the landlord's broker passed to you, it's prohibited.
A third is conflating "I talked to the broker" with "I hired the broker." Calling the number on a listing and being shown the unit by the landlord's agent does not make that agent your broker. You owe a fee only if you separately engage someone to represent you, ideally in writing.
Where Renters Get Stuck
- Listings that still quote a tenant fee. Some inventory hasn't been updated, or the agent is testing whether you know the law. You can ask directly: "Is this the landlord's broker? Then under the FARE Act I'm not responsible for the fee."
- Pressure at signing. A surprise "administrative" charge appears on the lease. This is the moment to slow down, ask what the charge is for, and refuse anything that's the landlord's broker cost in disguise.
- "Hire me and I'll get you in." An agent offers to be your broker for the unit they're already listing for the landlord - effectively recreating the old fee. You're free to decline and deal with the landlord's agent without owing a fee.
- Knowing it's wrong but not knowing where to go. Renters often sense a fee is improper but don't report it. DCWP is the enforcement body, and reports are what give the law teeth.
Your Step-by-Step Playbook
- Before you inquire, note who the listing agent represents. If the listing is the landlord's and shows a tenant-paid broker fee, treat that as a red flag and a negotiating point.
- Ask the question in writing (text/email): "Are you the landlord's agent, and is there any broker fee charged to me?" Save the answer.
- Read the fee disclosure. Under the FARE Act, all tenant fees must be disclosed in the listing and the lease. Match every charge you're asked to pay to that disclosure.
- At lease signing, audit the ledger. First month + one-month deposit + (only) a broker fee you personally agreed to + the $20 application fee. Question anything else.
- Refuse disguised pass-throughs. If an "admin/amenity/move-in" fee is really the landlord's broker fee, decline it and cite the FARE Act.
- If you want representation, hire your own broker deliberately, agree the fee and scope in writing, and know that fee is yours and negotiable.
- Report violations to DCWP with your screenshots and messages. Keep copies.
Weighing Your Options
| Situation | Who pays the broker | Your move-in cost | What to watch |
|---|---|---|---|
| Landlord-listed, no tenant broker fee | Landlord | Lowest | Confirm no disguised fees at signing |
| Landlord-listed, tenant fee quoted | Should be landlord | Inflated/illegal | Challenge it; report if pushed |
| You hire your own broker | You (by choice) | Higher, but for your representation | Negotiate fee and scope up front |
| "Admin/amenity" fee at signing | Often the landlord's broker fee in disguise | Hidden | Ask what it's for; refuse pass-throughs |
The default expectation for a landlord's listing is now zero broker fee to you. Anything else needs a legitimate, disclosed explanation.
The NYC Rules That Apply
- FARE Act (NYC), effective June 11, 2025: the party who hires the broker pays; mandatory disclosure of all tenant fees in advertising and the lease; enforced by DCWP.
- HSTPA (2019): security deposit capped at one month; application fee capped at $20. These interact with the FARE Act to define the full lawful upfront stack.
- Applies citywide to NYC residential rentals. Report violations to DCWP; keep documentation.
Run the Numbers
Old tenant broker fee (the two common formulas):
Fee (one-month method) = one month's rent
Fee (15% method) = 0.15 × (monthly rent × 12)
For $3,500/month: one-month = $3,500; 15% = $6,300. (The 15% method is larger and was the NYC norm.)
Your lawful move-in cash on a landlord-listed unit (post-FARE):
Move-in cash = first month + 1-month deposit + $20 application fee
(+ a broker fee ONLY if you hired your own broker)
FARE Act savings vs the old default:
Savings = old tenant broker fee - $0 = the entire former fee
On a $3,500 unit at the 15% norm, that's $6,300 back in your pocket.
Common Mistakes to Avoid
- Paying the landlord's broker fee out of habit. The default is now $0 to you on a landlord listing.
- Accepting a relabeled fee. "Amenity/admin/move-in" fees that are really the broker fee are prohibited.
- Assuming the showing agent is your agent. You owe a fee only if you separately hired representation.
- Not getting the fee answer in writing. A saved text is your evidence if you need to challenge a charge.
- Signing without auditing the lease ledger. Surprise fees appear at signing; that's when to slow down.
- Never reporting violations. Enforcement depends on renter reports to DCWP.
The Thing Most People Miss
The FARE Act doesn't just lower a number - it changes who you can trust in the transaction. Before, the agent showing you the apartment was paid by you but worked for the landlord, an inherent conflict you funded. Now, if you're not paying that agent, the relationship is honest: they represent the landlord, you represent yourself, and if you want someone on your side you can hire them knowingly. The deeper win isn't only the $6,300 - it's that you can finally tell whose interests each person in the room actually serves. Use that clarity: ask directly who represents whom, and make your decisions accordingly.
Renter Decision Layer
When this applies to you: any time you're renting in NYC and a broker is involved on the listing - which is most of the market.
Red-flag signals:
- A tenant-paid broker fee on a landlord's listing.
- A new "administrative/amenity/move-in" charge that appears only at signing.
- An agent reluctant to say in writing whom they represent.
- Pressure to pay anything before a signed lease.
Your quick checklist:
- Confirmed in writing who the listing agent represents.
- Verified no tenant broker fee on a landlord listing.
- Matched every charge to the lease's fee disclosure.
- Refused any disguised broker-fee pass-through.
- Saved all messages and the listing screenshot.
What to do next: if a charge doesn't survive this checklist, raise it in writing, decline to pay, and report to DCWP. If you genuinely want representation, hire your own broker and agree the fee in advance.
Quick Questions
Do I still have to pay a broker fee in NYC? Only if you hire your own broker. If the landlord put the broker on the listing, the landlord pays - you don't, as of June 11, 2025.
A listing still shows a "broker fee" for me to pay. Is that legal? Not if it's the landlord's broker. The fee for a landlord-hired broker can't be charged to you. Ask who the agent represents and, if it's the landlord, decline the fee and report it.
Can a landlord just rename the fee? No. Calling it an "amenity," "administrative," or "move-in" fee doesn't make it legal if it's really the landlord's broker cost passed to you.
What's my move-in cost now? On a landlord-listed unit: first month + one-month security deposit + the $20 application fee. Add a broker fee only if you chose to hire your own agent.
Where do I report a violation? The NYC Department of Consumer and Worker Protection (DCWP). Keep the listing screenshot and all messages.
Citations
- NYC DCWP - FARE Act / broker fees FAQ: https://www.nyc.gov/site/dca/about/FAQ-Broker-Fees.page
- NYC DCWP - announcement that the FARE Act is in effect: https://www.nyc.gov/site/dca/news/018-25/dcwp-the-fare-act-now-effect
- NY General Obligations Law §7-108 (deposit cap): https://www.nysenate.gov/legislation/laws/GOB/7-108
Related Reading
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.
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