Article
What You Need To Know About the FARE Act
REBNY
June 12, 2025
FARE ACT: What You Need to Know
1. Brokers Cannot Charge Tenants Broker Fees, Unless Retained by the Tenant: A broker representing a landlord cannot charge a tenant a broker fee in connection with a rental transaction. We strongly advise that brokers revisit their agreements with landlords where commissions are paid by the tenant.
2. The FARE Act Does Permit Compensation in Other Broker Relationships: The FARE Act permits compensation in the following rental relationships: (1) a tenant may pay a tenant’s broker, (2) a landlord may pay a landlord’s broker, and (3) a landlord may pay a tenant’s broker.
Brokers should clearly enter into agency relationships with the party that they represent. The use of the NYS Agency Disclosure Form and Compensation Agreements will be very helpful in this regard. For example, where a broker is representing a tenant, the broker should provide the NYS Agency Disclosure form indicating that the broker is representing the tenant, and the broker should enter into a Compensation Agreement with the Tenant. Dual agency is permitted in certain circumstances.
3. All Tenant Fees Must be Disclosed: Fees must be disclosed in two separate instances. Total fee disclosure from the law are included below:
a. In all advertisements or listings of rental apartments:
no one can include an unlawful broker fee; and
all fees that prospective tenants must pay to rent an apartment must be disclosed in a clear and conspicuous manner.
b. Prior to lease signing, landlords or their agents must give tenants an itemized written disclosure of all fees they must pay the landlord, or any person at the direction of the landlord, to rent an apartment. The fees must include a written description, and the tenant must sign the itemized disclosure before signing a lease. Landlords or their agents must keep the signed disclosure for three years and give a copy to the tenant.
While waiting for further 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.
4. Presumption of Landlord Permission Upon Listing Publication and its Impact on the RLS: 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.
Nonetheless, we want to ensure that rental listings may still be submitted to the RLS to the maximum extent possible under the FARE Act. Rental listings where the landlord is offering compensation to the tenant broker should be entered in the RLS as standard active listings. Rental listings where the landlord will not offer compensation to the tenant broker should be entered in the RLS as “Participant Only Network” listings.
5. Compliance May Be Enforced Through a 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 seeking damages and/or injunctive relief for alleged violations of the FARE Act.
6. 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.
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