Q: How can residential brokers in NYC collect fees directly from clients under the Fare Act?

A: The owners/landlords are your clients.

Jack

A: Under New York City's Fairness in Apartment Rental Expenses (FARE) Act, effective June 14, 2025, residential brokers cannot collect fees directly from tenants unless the tenant hires the broker themselves. If a landlord hires the broker, the landlord is responsible for paying the broker's fee. This law aims to alleviate financial burdens on renters by preventing landlords from passing broker fees onto tenants.

However, tenants have the option to hire their own broker. In such cases, the tenant would be responsible for paying the broker's fee. Additionally, if a broker represents both the landlord and the tenant (a dual agent), the tenant may be charged a fee, provided the arrangement is properly disclosed.

Violating the FARE Act can result in significant penalties. For a first offense, fines can start at $750, escalating to $1,800 for a second offense, and up to $2,000 for third and subsequent violations. These fines apply to both landlords and brokers who charge tenants illegal broker fees.

If you're a tenant and believe you've been charged an illegal broker fee, you can file a complaint with the New York City Department of Consumer and Worker Protection (DCWP). They can investigate the violation and, if necessary, impose fines or other penalties.

For brokers, it's crucial to ensure compliance with the FARE Act to avoid legal repercussions. This includes verifying who hired the broker and ensuring that any fees charged are in accordance with the law.

If you're uncertain about how the FARE Act applies to your situation, consulting with a legal professional specializing in real estate law can provide clarity and guidance.

A: Under the new NYC Fare Act, you’ll need to create clear, written agreements directly with your clients outlining the broker fees they owe. Your contracts should specify the amount, payment terms, and services provided, ensuring compliance with any fee limits and disclosure requirements the law mandates.

To attract clients, focus your marketing on your expertise, success in finding apartments, and transparent fee structures. Use online platforms, social media, and networking events to reach renters looking for reliable brokers who can guide them through the process under the new rules.

Legally, make sure your agreements comply with the Fare Act’s consumer protections and avoid any practices that could be seen as steering or discriminatory. Regularly update your contracts and disclosures as regulations evolve, and consider consulting a real estate attorney to review your forms. This proactive approach helps you build trust with clients while minimizing legal risks.

A: Under the new NYC Fare Act, you’ll need to create clear, written agreements directly with your clients outlining the broker fees they owe. Your contracts should specify the amount, payment terms, and services provided, ensuring compliance with any fee limits and disclosure requirements the law mandates.

To attract clients, focus your marketing on your expertise, success in finding apartments, and transparent fee structures. Use online platforms, social media, and networking events to reach renters looking for reliable brokers who can guide them through the process under the new rules.

Legally, make sure your agreements comply with the Fare Act’s consumer protections and avoid any practices that could be seen as steering or discriminatory. Regularly update your contracts and disclosures as regulations evolve, and consider consulting a real estate attorney to review your forms. This proactive approach helps you build trust with clients while minimizing legal risks.