NYC Broker Fee Law: Coverage, Exceptions, and Disclosures

Under New York City’s broker fee law, the Fairness in Apartment Rental Expenses (FARE) Act, a landlord who hires a broker to fill a vacancy has to pay that broker’s fee themselves. They cannot pass it to you. The law took effect on June 11, 2025, and applies to any residential rental in the city where the broker is working for the landlord. Broker commissions in NYC have historically run 12 to 15 percent of annual rent, so on a $3,000-per-month apartment that shifts $4,300 to $5,400 off the tenant’s upfront bill.¹

Who the Law Covers

The FARE Act, formally Local Law 119 of 2024, says a landlord’s agent cannot charge any fee to a prospective tenant. That includes listing agents who publish the apartment with the landlord’s permission. The law presumes any agent who publishes a listing is doing so with the landlord’s authorization, which closes off the old workaround where a broker claimed they weren’t technically working for the owner.¹

Landlords also can’t require you to hire a specific agent or a dual agent (someone representing both sides) as a condition of renting. And if the landlord’s agent charges you an illegal fee, the landlord is directly on the hook, not just the broker.¹

When You Can Still Be Charged a Broker Fee

You can still hire your own broker. If you sign an agreement with an agent to search for apartments on your behalf, that’s your broker and you owe their fee. The dividing line is who hired the broker first and whose interests they’re contractually bound to serve.

Practical test: if you found the apartment through an online listing and a broker showed you the unit, that broker works for the landlord and you owe nothing. If you engaged someone to search for you before they ever showed you a specific place, that’s a tenant’s broker and the fee is yours to negotiate.¹

New York state law already requires every agent in a rental deal to present you with the New York State Disclosure Form for Landlord and Tenant at first substantive contact. That form says in writing whether the agent represents the landlord, you, or both. If the form says the agent represents the landlord, the FARE Act prohibits them from charging you a fee.²³

What Must Be Disclosed Before You Sign

Every apartment advertisement and listing must disclose any fees the tenant will owe, and no listing can include an unlawful broker fee. Before you sign a lease, the landlord or their agent has to give you an itemized written disclosure listing every fee you’ll pay to the landlord or anyone acting at the landlord’s direction. Each fee needs a written description. You sign the disclosure before you sign the lease. The landlord keeps the signed copy on file for three years and gives you a copy.¹

If a broker or landlord can’t hand you a clear, itemized breakdown of every fee before lease signing, that’s a problem. Skipping the disclosure carries its own penalties separate from the fee prohibition.

Other Upfront Charges a Landlord Can and Can’t Collect

The FARE Act doesn’t cover every charge you’ll see at move-in. Two other state law limits do most of the work on upfront costs.

Under the Housing Stability and Tenant Protection Act of 2019, a landlord cannot demand any payment, fee, or charge before or at the start of your tenancy except for a background and credit check, and that screening fee is capped at $20 total.⁴ Processing fees, administrative charges, move-in fees, and other line items that push pre-lease costs above $20 violate state law. The $20 cap covers everything combined, not $20 per type of check. If you provide your own credit report or background check conducted within the prior 30 days, the landlord has to accept it and can’t charge the screening fee at all. If they do collect the fee, they must give you a copy of the report.

Security deposits are also capped. For nearly all residential tenancies, the deposit cannot exceed one month’s rent, regardless of the apartment’s price, your credit history, or lease length.⁵ Narrow exceptions apply to seasonal-use units, owner-occupied cooperative apartments where the tenant becomes a shareholder, continuing care retirement communities, and certain licensed assisted-living facilities. For the vast majority of NYC apartments, one month is the ceiling, and a landlord asking for “first month, last month, and security” is asking for more than the law allows.

If You’re Denied Based on a Credit or Background Report

Federal law adds a layer whenever a landlord pulls your credit report or runs a background check. Under the Fair Credit Reporting Act, the landlord needs a “permissible purpose” to obtain your consumer report, and screening you for housing qualifies only if they actually have a vacancy you’ve applied for.⁶

If the landlord denies you, requires a co-signer, or raises the rent based even partly on information in your consumer report, federal law requires an adverse action notice. That notice must include the name, address, and phone number of the screening company, a statement that the screening company did not make the rental decision, and notice of your right to dispute inaccurate information and obtain a free copy of the report within 60 days. If a credit score factored in, the landlord also has to give you the score, its range, and the key factors that hurt it.⁷

Plenty of NYC landlords skip this notice, especially when they simply stop responding. If you applied, paid the screening fee, and never heard back, you may still be entitled to that notice.

What to Do If a Broker or Landlord Charges You Anyway

The NYC Department of Consumer and Worker Protection (DCWP) enforces the FARE Act. You can file a complaint online through the city’s consumer complaint portal. Bring evidence: text messages, screenshots of the listing, receipts, Venmo or Zelle records, and the broker’s contact information. If DCWP sustains the violation, the violator faces a civil penalty and may be ordered to pay restitution for any illegal fees. Fee-provision violations carry penalties up to $1,000 for a first offense and up to $2,000 for each subsequent violation within two years. Disclosure and record-keeping violations carry $500 fines, rising to $1,000 for repeat offenses.¹

You don’t have to wait for the city. The FARE Act gives you a private cause of action, meaning you can sue in civil court directly if a landlord or broker charges you an illegal fee.¹

Separately, the New York Department of State licenses brokers statewide. A broker found guilty of fraud, dishonest advertising, or untrustworthiness can have their license suspended or revoked, or face a fine of up to $2,000 in lieu of suspension.⁸

Is the Law Actually in Effect?

Yes. The Real Estate Board of New York filed a legal challenge, and as of late 2025 it pressed the U.S. Court of Appeals for the Second Circuit to block the law. The FARE Act still took effect on its scheduled date and remains enforceable. DCWP continues to accept complaints and issue summonses.

If a broker or landlord tells you the law “isn’t really in effect” because of the lawsuit, that is incorrect. Unless a court issues an injunction suspending the law, it applies to every covered transaction. Save that message. It may be useful if you file a complaint later.

Section 8 Voucher Holders

The NYC Housing Authority runs a separate broker fee policy for Section 8 Housing Choice Voucher holders. NYCHA will pay a broker fee directly to a licensed real estate firm for eligible first-time voucher holders who have held their voucher for more than 60 days, capped at 15 percent of the annualized rent. The policy does not apply to transfers, restorations, or voucher holders already receiving housing search assistance from another agency.⁹

NYCHA won’t issue the payment until you have the keys, and all paperwork must be submitted within 30 days after the housing assistance payments contract is executed. If you hold a Section 8 voucher and a broker tries to charge you directly, both the FARE Act and NYCHA’s own payment policy may apply.⁹

1
New York City Department of Consumer and Worker Protection. Fairness in Apartment Rental Expenses (FARE) Act
2
New York State Senate. New York Real Property Law 443
3
New York State Department of State. New York State Disclosure Form for Landlord and Tenant
4
New York State Senate. New York Real Property Law 238-a
5
New York State Senate. New York General Obligations Law 7-108
6
Federal Trade Commission. What Tenant Background Screening Companies Need to Know About the Fair Credit Reporting Act
7
Federal Trade Commission. Using Consumer Reports: What Landlords Need to Know
8
New York State Senate. New York Real Property Law 441-c
9
NYC Housing Authority. Frequently Asked Questions About NYCHA’s Broker Fee Policy