The FARE Act: what New York City owners and management companies actually need to do

Who pays the broker fee on a NYC rental?

Whoever hired the broker pays the broker. If you as the owner engaged an agent to lease your unit, or the agent published your listing with your permission, that agent is paid by you and may not charge the tenant. If a renter independently hires their own broker to represent them, that renter pays their own broker. There is no third option.

Before the FARE Act, roughly 46.8% of NYC rentals charged tenants a broker fee, rising to 57.3% on units below the median rent, typically around 12% of annual rent (StreetEasy). The law repriced about half the market overnight.

What the FARE Act actually requires

The Act is Local Law 119 of 2024, codified at NYC Administrative Code §§ 20-699.21 and 20-699.22. It does four prohibitions and two disclosure duties.

§ 20-699.21 — the prohibitions

• (a) An agent who published the listing with the landlord's permission, or who has agreed to represent the landlord, may not impose or collect a fee from the tenant.
• (b) The landlord is liable for the agent's unlawful fee, with a rebuttable presumption that the listing was published with the landlord's authorization.
• (c) A rental may not be conditioned on the tenant engaging an agent.
• (d) Unlawful fees may not be posted in a listing.

§ 20-699.22 — the disclosure duties

• (a) Every listing or advertisement must disclose, clearly and conspicuously, all fees the tenant will have to pay.
• (b) Before the lease is signed, the landlord or agent must give the tenant an itemized written disclosure of every fee with a short description of each. The tenant signs it. The landlord gives the tenant a copy and retains it for three years.

What you can still charge

• First month's rent.
• A security deposit of no more than one month.
• A background and credit check fee capped at $20 total under Real Property Law § 238-a.

You cannot inflate the first month's rent to bury the broker cost. DCWP's own guidance uses the example of charging $5,040 up front on an $1,800 per month unit.

What are the penalties for a FARE Act violation?

DCWP adopted the penalty schedule at 6 RCNY § 6-89, effective 10 July 2025. Each subdivision charged is a separate violation, and a “second” violation means the same respondent within two years.

Source: DCWP notice of adoption, 6 RCNY § 6-89. Enforcement is by DCWP; complaints come in via 311 and are heard at OATH. Tenants also have a private right of action in civil court, which carries attorneys' fees exposure.

Am I liable if my broker breaks the FARE Act?

Presumptively, yes. This is the provision owners most consistently underestimate. Section 20-699.21(b) makes the landlord liable for an agent's unlawful tenant fee and establishes a rebuttable presumption that the listing was published with the landlord's authorization. The burden is on you to rebut it.

REBNY asked DCWP to allow owners to rebut the presumption with a simple affidavit. DCWP did not adopt that. In practice, rebutting means appearing at an OATH hearing.

Is the FARE Act still being challenged in court?

Every court to consider it has let the law stand. The Real Estate Board of New York sued to block it. On 10 June 2025 the Southern District of New York denied REBNY's preliminary injunction, one day before the effective date. REBNY appealed. In July 2026 the Second Circuit affirmed that denial, treating the FARE Act as a regulation of commercial speech that advances a substantial government interest and survives intermediate scrutiny.

One honest caveat: that ruling concerned preliminary relief, and reporting indicates the case continues. But planning your leasing on the assumption the law will be reversed is not a plan. Sources: The Real Deal, NY Daily Record.

What actually happened in year one

Enough time has passed to replace speculation with numbers. As of 1 June 2026, DCWP had received 2,033 complaints, issued 74 summonses alleging 100 violations, and assessed $27,125 in penalties against 33 brokers, plus $15,500 in restitution to 20 tenants. Complaint volume fell from about 50 a week early on to about 25.

On rents, StreetEasy measured an average increase of 1.1% — roughly $46 a month — on broker-represented rentals, against an average avoided upfront tenant fee of $5,862. Anecdotally some small owners raised rents closer to 8%, so the aggregate figure hides real variation.

On supply, the disruption was brief. Inventory fell 1,049 units (3.1%) in the first three business days, 93.9% of it broker-represented — and had recovered to 14,094 units a day by 30 June 2025, only 4.5% below the prior year and 40% above June 2022.

Researchers at the NYU Furman Center have cautioned that data on rents and commissions together is thin enough that the law's isolated effect is genuinely hard to measure. Treat any confident single number about the FARE Act's impact — including ours — with that in mind.

Can I raise the rent to cover the broker fee?

On a free-market unit, yes, and most owners did — modestly. The aggregate pass-through was about 1.1%. The constraint is not legal, it is competitive: you are pricing against every other listing in your submarket, and a unit priced above its comps sits, which costs more than the fee.

What you cannot do is disguise the fee as something else. Charging an inflated first month, a “move-in fee”, an administrative fee, or a “good-faith deposit” to hold a unit are all routes to a violation.

If your units are rent-stabilized, this is a different problem

Roughly 41.3% of occupied NYC rentals are rent-stabilized. For those units the pass-through conversation does not exist. On 25 June 2026 the Rent Guidelines Board adopted a 0% increase on both one-year and two-year renewal leases commencing between 1 October 2026 and 30 September 2027 (RGB).

So a stabilized owner now pays the broker fee on every turn, with zero ability to recover it through rent. That leaves exactly two levers:

1. Retention. A renewal you keep is a fee you never pay and a vacancy you never carry. On stabilized stock, retention is the highest-return activity available.
2. Speed. When a unit does turn, every day empty is unrecoverable. There is no rent increase later to make it back.

Should I just list the unit myself?

It is a fair question now that you are the one paying, and for some owners the answer is yes. It is worth saying that very few take this route: unlike most American cities, almost every New York apartment leases through a broker. But run the arithmetic properly, because the listing fee is not the expensive part.

At the current 36–37 days median time to lease, a self-listed unit burns roughly $750 in StreetEasy fees alone before anyone signs — and one extra month of vacancy at the Brooklyn median is about $4,350.

For most owners, though, this is not the decision in front of them. They already use a broker, so the question that actually costs them money is which brokerage, and how long the last unit sat before it signed. That number is worth knowing precisely. Run your own numbers here.

Tactics that will get you fined

These are the behaviors generating actual complaints. If a brokerage suggests any of them, that is your answer about the brokerage.

• Bait and switch. Advertising a unit, telling the caller it is gone, then offering a “similar” unit that carries a tenant-paid fee. One tenant reported hitting this in three of five broker interactions.
• Whisper listings. Units held off-market and shown only to tenants willing to pay a fee.
• Good-faith deposits to hold a unit — separately barred under state law.
• Inflating the first month or inventing move-in, administrative or key fees.
• Conditioning the rental on the tenant engaging a particular agent.

A compliance checklist for owners

1. Know who hired the broker on every one of your listings. If it was you or your managing agent, the tenant pays no fee.
2. Read your own listing copy. Every tenant-paid fee must appear clearly and conspicuously in the advertisement itself.
3. Confirm the credit and background check charge is no more than $20 in total.
4. Produce an itemized written fee disclosure, with a short description of each fee, and have the tenant sign it before lease signing.
5. Give the tenant a copy. Not optional.
6. Retain the signed disclosure for three years, somewhere you could actually find it under audit.
7. Put the compliance obligation in writing in your agreement with any brokerage you engage, and ask how they document it.
8. If a unit is rent-stabilized, plan for retention and speed. The RGB increase is 0% and there is no pass-through available.

Primary sources

• NYC DCWP — FARE Act FAQ
• NYC DCWP — announcement that the FARE Act is in effect
• DCWP — adopted penalty schedule, 6 RCNY § 6-89
• NYC Rent Guidelines Board — adopted guidelines 2026–27
• StreetEasy — the NYC rental market one year after the FARE Act
• The Real Deal — year-one complaints and refunds