New York’s real estate brokerage ban has many problems: landlords exploit loopholes and pass brokerage fees on to tenants
Less than two weeks after the implementation of the latest “FARE Act” in New York City, it was reported that landlords and agents were suspected of exploiting legal loopholes and passing on agency fees to tenants under different names. The City’s Department of Consumer and Worker Protection (DCWP) confirmed that it has received nearly 300 related complaints since the law came into effect on the 11th.
Nearly 300 complaints in 10 days
Real estate agents said that similar problems had already occurred when the bill was first implemented in 2023, but agents should clearly list the fees when negotiating with tenants, and both parties should agree before trading to avoid related disputes. However, if disputes are to be avoided fundamentally, landlords and tenants should each pay half.
Fees charged under various names are as high as thousands of dollars
The bill clearly stipulates that if a landlord hires an agent to handle rental matters, the relevant fees cannot be passed on to the tenant. However, many tenants recently reported to the media and DCWP that agents still charge thousands of dollars in fees under the names of “application fees”, “management fees”, and even “technology service fees”, and some people are required to sign a statement falsely claiming that “the tenants actively hired the agent” in order to circumvent regulations. Some tenants pointed out that if they refuse to sign the statement, the agent will not provide house viewing or application services.
Similar situations have also occurred on rental platforms, such as a listing in Brooklyn that charges a “rental arrangement fee” of more than 5,000 yuan, and a listing in Bayside, Queens, directly marked the clause “Tenants must hire a designated agent”. Recently, some netizens on the social media Xiaohongshu pointed out that after the bill was enacted, real estate agents still charged agency fees on the grounds of “whoever hires pays” and “not the landlord hired to post the listing”, questioning whether the bill has ultimately become a rhetoric. Some landlords even pointed out that they posted their listings online, but an agent wrote down the rental information and modified the contact number before posting it again, causing the listings to be “blocked”.
Agent Kang Kai pointed out that this kind of situation had occurred in 2023, but in the past, tenants were rarely required to sign a statement, and only a cooperation agreement was required for the sale and purchase of real estate. He also said that agents should discuss the fees clearly when communicating with tenants. Although there is still a possibility that some agents may exploit legal loopholes, only when both parties agree to pay can consumer disputes be effectively avoided. Regarding the current problem of the endless stream of bills, he believes that the best approach should be to let landlords and tenants each bear half of the agency fees, but the bill should also be given some time to ferment, and the direction of the bill after the mayoral election at the end of the year may also change due to the candidates’ political views.
Rental website urges people to keep records and report
Allia Mohamed, CEO of rental website Openigloo, said that the current chaos is the initial pain period of the new law, and suggested that tenants keep relevant documents and conversation records and take the initiative to report improper behavior to the city government. City Councilman Chi Osse, who proposed the bill, also called on the public to consider it illegal if an agent falsely claims to “represent the tenant” and to file a complaint through the city government’s 311 hotline or the DCWP website.
