Article
What You Need To Know About the FARE Act
REBNY
June 3, 2025
FARE ACT: What You Need to Know
Brokers Can No Longer Charge Tenants Broker Fees, Unless Retained by the Tenant:
A broker representing a landlord cannot charge tenants a broker fee in connection to a rental transaction. The FARE Act permits tenants to pay brokers that they retain and allows landlords to pay a tenant’s broker. We strongly advise that brokers revisit their agreements with landlords where commissions are paid by the tenant.
Brokers representing tenants should carefully present and explain the NYS Agency Disclosure Form at first substantive contact with the tenant to establish an agency relationship. Fee/Compensation Agreements should be entered into between the broker and the tenant to reinforce the agency relationship.
All Tenant Fees Must be Disclosed:
Rental listings must include all fees paid by the prospective tenant for the rental of the unit.
Additionally, prior to lease signing, landlords or their agents must disclose a list of all fees payable to the landlord in connection with the rental. The list must include a short description of each fee.
While waiting for guidance from the NYC Department of Consumer and Worker Protection as to what fees should be included, we strongly advise being overly inclusive concerning any landlord-imposed fees that the tenant may encounter during the tenancy. The list should include prospective fees such as lost key, pet charges, move-in/move-out, etc.
Presumption of Landlord Permission Upon Listing Publication:
The FARE Act presumes that any broker publishing a rental listing does so with the permission and authority of the landlord of that rental unit. Brokers must ensure they have the landlord’s permission and authority to publish a rental listing to avoid unnecessary disputes with the landlord.
Landlords may still advertise “collect your own fee” listings but are strongly advised to do so only on their website, social media, or other communication channels within their sole control. This means that only “owner-pays” rental listings should be entered onto the RLS.
“Collect your own fee” listings posted by landlords should include a clear and conspicuous disclaimer stating: “This advertisement is for informational purposes only. This advertisement is not intended to create an agency relationship between a real estate licensee and the landlord. This advertisement should not be re-published.”
Compliance May Be Enforced Through Private Right of Action:
In addition to enforcement actions by the DCWP, violations of the FARE Act could be pursued through lawsuits brought by ordinary individuals.
Financial Penalties for Non-Compliance:
Violations of the FARE Act may result in financial penalties of up to $2,000.
For any further questions or comments, please contact generalcounsel@rebny.com.
