NYC renters will no longer face sky-high broker fees when attempting to lease an apartment. Instead, those costs will fall on the landlord’s shoulders
It’s a reversal of practice that could have a sweeping impact on both New Yorkers’ pocketbooks, as well as the local real estate industry as a whole.
Here’s how the statement explains it: “The $20 limitation applies to licensed real estate brokers and salespeople acting as an agent of the landlord, lessor, sub-lessor or grantor. A licensed agent that collects a fee greater than $20 or fails to advise the landlord that such fees are prohibited may be subject to discipline by the Department … A landlord’s agent cannot be compensated by the prospective tenant for bringing about the meeting of the minds.
“First of all, the law does not forbid tenant's agents from charging tenants a commission for their services. What the law does is shift the landlord's real estate agent commission back to the party that should have been covering it all along.” Zinkovetsky says. “Landlords pay their broker fees almost all over the U.S. and the world. NYC was an abnormality in that sense. After all, landlords are the ones choosing and hiring their agents to represent them, not tenants.
Andrew Barrocas, CEO of MNS—a New York City-based real estate brokerage—says landlords paid the commissions in 98% of his firm’s rental transactions last year. But that approach has historically not been the norm in New York City—and it could come with some serious hurdles for those looking to pivot.
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