New York City’s year-old ban on most apartment broker fees was supposed to curb extortionate leasing practices and help renters save thousands of dollars in upfront costs before moving into an apartment.
But while many tenants are seeing a financial benefit, city data shows enforcement has so far been slow to keep pace with a flood of complaints over illegal practices. And renters say brokers are finding ways around the law.
The city’s Department of Consumer and Worker Protection received 2,033 complaints alleging violations of the Fairness in Apartment Rental Expenses, or FARE Act, and issued 74 summonses alleging 100 violations by brokers, landlords and managers as of June 1, the agency said.
It has also secured about $15,500 in restitution for 20 tenants found to have paid illegal fees and another $27,125 in penalties from 33 brokers for 46 violations after an Office of Administrative Trials and Hearings process over the past year.
Councilmember Chi Ossé, a Brooklyn Democrat who sponsored the FARE Act, said the law is having an impact and saving tenants money, but that he wants to see the city crack down more aggressively.
“It's great that the New Yorkers were awarded restitution for some of the illegal fees that they were forced to pay,” Ossé said. “I want them to be able to move at a quicker pace when it comes to enforcing this bill.”
Mayor Zohran Mamdani’s executive budget proposal includes 77 new staff positions to handle a range of issues at the Department of Consumer and Worker Protection, including FARE Act violation claims. The Council has requested $32 million to actually hire the new workers and beef up enforcement.
In an interview, Department of Consumer and Worker Protection Commissioner Sam Levine said each complaint takes time to investigate and reach a conclusion.
“Those cases are working their way through the system,” Levine said. “We want to make sure that no New Yorker is paying an illegal broker fee.”
Levine said the measure is curbing illegal fees and pointed to a significant recent decrease in the number of complaints the agency receives — from an average of 50 a week shortly after the law took effect to 25 today. He attributed that drop to brokers and landlords complying with the new law after a transition period.
The FARE Act requires whoever hires a broker to pay their fee, rather than automatically shifting a hefty cost onto unwitting tenants in addition to their security deposit and first month’s rent.
The measure took effect on June 11, 2025, and marked a dramatic change in the city’s real estate market, where tenants had long been forced to shoulder a fee typically equal to a month’s rent or more — even when they did not seek out a broker to assist in their apartment search or find the broker helpful whatsoever.
The law was something of a holy grail for renters and lawmakers eager to eliminate a uniquely New York financial burden. Few other places in the country impose broker fees on tenants.
Critics of the law abound in the city’s real estate industry. The Real Estate Board of New York, an influential lobbying group that represents brokers, called the legislation confusing.
REBNY and top brokerage firms also say the FARE Act has driven rents higher because landlords often bake the fee into their monthly price.
But rents in the city have been on a precipitous rise for years, and other housing experts say it's difficult to isolate the ban's impact on most fees or to attribute recent increases to the law.
‘It really feels like a gray area’
The new law has also given rise to new schemes and workarounds to extract cash from tenants. Real estate professionals say the law has fostered an underground market of so-called whisper listings that aren’t posted on popular rental listing sites and are reserved for prospective tenants willing to pay the fee.
A common tactic, according to renters and regulators, is a “bait and switch” where agents list an apartment and then notify inquiring tenants that the unit is no longer available. The broker then says they can show similar units and help tenants secure a lease — for a fee.
Emlyn Orr, 27, said she constantly encountered the scheme during an “exhaustive” apartment search in Brooklyn that finally ended when she and her partner moved into a new two-bedroom apartment on June 1.
Orr kept detailed stats of her apartment hunt and shared documents with Gothamist listing over 50 apartments, with rents ranging from around $2,300 to $3,000 a month, that she and her partner had inquired about.
“We really made this our full-time jobs, so we'd be seeing things only hours after they were posted,” Orr said.
When brokers responded, she said, the majority told her the unit she had contacted them about was no longer available, but that they had others.
"In the message, they would say, ‘This comes with a fee,’” Orr said. ”Three out of five encounters were ‘bait-and-switches.’”
Orr and her partner viewed 14 units, according to a detailed spreadsheet she maintained. In many cases, the couple encountered surprise fee requests and what Orr described as shady practices.
She said one of the brokers tried to charge a $7,000 fee for a $1,600-a-month rent-stabilized apartment in Brooklyn, and that four others either tried to charge them a fee or a “good-faith deposit” — additional money down to hold a unit or take it off the market. State law also prohibits that practice.
The couple finally settled on a $2,300-a-month apartment in Brooklyn — after agreeing to pay a broker fee.
She said the broker asked them to sign a form saying they were hiring him in order to view the apartment.
Orr said she finally gave up on her effort to avoid the fee because the broker was “extremely helpful” with completing the application and communicating with the building owner, which made her more comfortable paying the $3,000.
But, she added, “it really feels like a gray area.”
She said she hopes the city will continue cracking down on bait-and-switches because the fees unfairly lock out many prospective tenants.
“We were very lucky to be in a position to do that,” she said. “A lot of my friends don't have three grand lying around to secure an apartment with being worried about loans and already living in very expensive places.”
The tactic has a formal name when it comes to enforcement: “conditioning,” where a broker imposes the fee as a condition for viewing and leasing an apartment. And Levine, the Department of Consumer and Worker Protection commissioner, said the FARE Act is designed to prohibit those schemes.
“If people are telling us they are unable to get rental housing but for paying a broker fee, we consider that conditioning,” Levine said.
The Real Estate Board of New York counters that the legislation is confusing for brokers who face punishment for offering to show apartments and charge a fee for units they are not explicitly listing.
“There has been significant confusion around what the law actually regulates,” said REBNY Senior Vice President Carl Hum.
The organization is waging a legal battle against the FARE Act and awaiting a decision from an appellate court. A federal judge denied REBNY’s request to halt the new law while the case played out last June, a day before the law took effect.
Impact on rents?
The FARE Act has sparked an ongoing debate over the new law's impact on rents. What that impact is depends on who you ask.
Real estate industry insiders say it’s driving up rates because landlords are factoring the fee into the monthly rent. The law's proponents, like tenant groups and city lawmakers, say it saves money upfront even if it leads to small monthly increases. And about 1 million apartments are rent-stabilized, meaning landlords cannot legally raise the rent to offset the fee.
Suzanne Goldklang, a licensed real estate agent who handles sales and rentals, said the new law has had a mixed financial impact for tenants.
“It is certainly beneficial to people who are moving because it takes less money to move, but you are paying that higher rent forever,” Goldklang said.
She said most big property owners handle leasing in-house without brokers, but small and midsized landlords have been raising rents by about 8% on listings she handles to offset her fee, which equals 8% of the annual rent. She cited an East 49th Street condo she worked with a tenant to lease for about $2,700 a month last year, before the FARE Act. She said she expects the rent to be closer to $3,000 when it next becomes available.
“I’m sure when it goes back on the market, it will be 8% higher,” she said.
The Real Estate Board of New York, which represents brokers, and many of the city’s largest brokerages have also pinned rising rents, in large part, on the FARE Act.
Median rents in New York City have reached record-highs in recent months, but many housing experts, including proponents of the broker fee ban, say prices have been soaring for five years — well before the FARE Act. Prices began to surge unabated in 2021, following a temporary dip during the COVID pandemic.
The listings site StreetEasy, which backed the legislation, released a new report Thursday that finds median rents rose to $4,199 last month, a 7.3% increase since May of last year. But the report attributes that to a surge in demand during an historic housing shortage. The five boroughs had an apartment vacancy rate of just 1.4%, according to the city’s most recent housing survey.
StreetEasy’s analysis found that rents rose by just 1.1% in apartments listed by brokers hired by a landlord, while tenants saved an average upfront broker fee of $5,862.
Ossé, the FARE Act sponsor, said the solution to slowing the rise in rents is to build more housing, not assess more fees.
“ The rent has increased because of the lack of supply that exists here within the city,” he said. “This bill was not the reason that rents have gone up, and they have been going up every single year, even prior to this bill being enacted.”
How has your apartment hunt gone? How has the FARE Act affected you? Let reporter David Brand know at [email protected]
