New York City’s real estate market has always been tied to policy as much as to supply and demand. From zoning reforms to rental regulations, the rules governing how agents operate shift constantly, and those who stay ahead of these changes gain a decisive advantage. Among the most consequential recent developments is the Fairness in Apartment Rental Expenses (FARE) Act, a law that fundamentally reshapes rental transactions across the city. Undoubtedly, if you are an NYC-based agent, you have some level of understanding of the FARE Act, but if not, here is an overview and suggestions for navigating the business changes it causes. For NYC agents, understanding this legislation is crucial to success; in some ways, it has become tied to operatingeffectively and advising clients with confidence.
What the FARE Act Actually Does
According to the NYC Department of Consumer and Worker Protection (DCWP), the FARE Act — Local Law 119 of 2024 — makes two major changes:
- Landlords can no longer pass their broker’s fees to tenants.
If the broker represents the landlord, the landlord must pay the broker’s fee.
This includes:
- Listing agents
- Any agent hired by the landlord to market or show the apartment.
- Landlords must disclose all fees upfront.
Before a tenant signs a rental agreement, the landlord must explicitly disclose every fee the tenant will be required to pay.
This transparency requirement is designed to eliminate hidden charges and surprise costs — a long‑standing pain point for NYC renters.
What Fees Are Prohibited?
The law prohibits a landlord’s agent from charging any fees to prospective tenants.
This includes:
- Broker fees
- Application fees charged by the landlord’s agent
- Any fee tied to the rental process that originates from the landlord’s side
If the agent represents the landlord, the tenant cannot be charged — period.
The only time a tenant may pay a broker fee is when the tenant hires the broker themselves.
Unfortunately, similar to the rent control ordinance, the policy hasn’t worked exactly as intended. On paper, lords are supposed to pay the real estate agents’ commission, which has led to higher prices; thus, the commission is snuck into the apartment’s cost.
What This Means for NYC Agents
The FARE Act fundamentally changes how rental agents must operate. Here’s what NYC professionals need to prepare for:
- Listing Agents Must Rethink Their Business Model
Tenant‑paid commissions are no longer allowed when representing the landlord.
Agents must now:
- Negotiate fees directly with landlords.
- Demonstrate clear value to justify those fees.
- Adjust marketing strategies to reflect the new cost structure.
- Fee Transparency Is Mandatory
Agents must ensure that landlords disclose all tenant‑paid fees in:
- Listings
- Applications
- Rental agreements
Failure to comply can result in DCWP enforcement and fines.
- Landlords May Change Their Hiring Behavior
Because landlords now bear the cost, they may:
- Become more selective about hiring brokers.
- Expect stronger ROI from listing agents.
- Increase rents to offset new expenses (a trend already noted by industry observers)
- Tenants Will Have More Questions — and Agents Must Have Answers
Agents should be prepared to explain:
- Why they can or cannot charge a fee
- What fees are legal
- How the FARE Act affects the rental process
Clear communication will be a major differentiator.
Real‑World Example: A Typical NYC Rental Before and After the FARE Act
Before June 11, 2025:
A renter tours an apartment with the landlord’s broker and pays a broker fee — often one month’s rent or more — even though the broker represented the landlord.
After the FARE Act:
The same renter tours the same apartment with the same broker.
The landlord must now pay the broker fee, unless the renter hired the broker themselves.
This shift dramatically changes the economics of NYC rentals and the expectations placed on agents.
Other Policies NYC Agents Should Still Watch
While the FARE Act is the headline, NYC agents should remain aware of other policy forces shaping the market:
Federal
- Fair Housing Act: Compliance remains essential.
- Trade and tariffs: Higher costs for imported materials (steel, glass, lumber) affect new development and renovations.
Local NYC
- Zoning reforms (City of Yes): Expands opportunities for conversions and mixed‑use development.
- Rent stabilization rules: Ongoing updates affect pricing and turnover.
- Building codes: NYC’s strict safety and environmental standards add complexity to renovations and new builds.
These policies matter — but none currently reshape day‑to‑day rental operations as directly as the FARE Act.
How NYC Agents Can Stay Ahead
- Strengthen Your Value Proposition
Landlords will be more selective. Agents must clearly articulate:
- Market expertise
- Tenant‑screening capabilities
- Marketing reach
- Pricing strategy
- Build Transparent, Compliant Processes
Ensure all listings and agreements meet DCWP disclosure requirements.
- Educate Clients Proactively
Both landlords and renters will need guidance.
Agents who can explain the law clearly will build trust quickly.
- Adapt Your Marketing Strategy
With landlords paying fees, agents may need to:
- Improve listing quality
- Expand advertising channels
- Invest in a stronger digital presence.
Final Word
The FARE Act marks a turning point in NYC real estate. It reshapes rental transactions, redefines agent responsibilities, and elevates transparency and professionalism. For NYC agents, success now depends on mastering this new landscape — understanding the law, educating clients, and adapting business models to meet shifting expectations.
At RLTYco, we believe that agents who embrace policy awareness as part of their professional toolkit will not only stay compliant but also gain a competitive edge. The future of NYC real estate belongs to those who can navigate change with clarity, confidence, and expertise.
