Latest news with #RealEstateBoardofNewYork
Business Times
13-06-2025
- Business
- Business Times
New York real estate industry appeals broker-fee case ruling
[NEW YORK] Real estate groups are challenging a ruling by a federal judge that allowed New York City to begin enforcing a new law requiring landlords, rather than their tenants, to pay fees for hiring listing brokers. US District Judge Ronnie Abrams on Tuesday (Jun10) denied a request by the Real Estate Board of New York, the New York State Association of Realtors and others to pause the law while their lawsuit proceeds. The ruling was another setback for the industry's legal fight against the measure, which went into effect on Wednesday (Jun 11). The groups on Thursday filed an appeal of Abrams' decision to the US Court of Appeals for the Second Circuit. The City Council adopted the measure in November to end the longstanding practice of tenants being forced to pay costs incurred by landlords to hire the brokers who list their properties, which can add thousands of dollars to housing costs. The real estate industry argued the new law branded brokers as villains and would force landlords to raise rents to cover the costs of hiring them. New York City renters who settle on apartments that have broker fees pay an average of almost US$13,000 to secure the keys to a property, which frequently includes thousands of dollars in fees for brokers hired by landlords to secure tenants, according to an analysis by StreetEasy released last year. Roughly 40 per cent to 50 per cent of listings on StreetEasy have required lease signers to pay the commissions of agents hired by their new landlords, which have typically ranged from one month's rent to 15 per cent of the annual bill. The Real Estate Board contends that the law, known as Fairness in Apartment Rental Expenses Act, or FARE Act, interferes with exclusive agreements that landlords sign with brokers to list their properties and find tenants, in violation of the Constitution's bar against state laws impairing private contracts. It also argues the law violates the free-speech rights of landlords and brokers who publish real estate listings and then seek to receive compensation from tenants for the cost of the listing service. The industry's lawsuit alleges that the law will make rent-stabilised apartments too costly to operate and force landlords to raise rents to cover the cost of broker fees. The industry says tenants usually pay less over the life of a lease when commissions are paid separately, and that some are already refusing to pay broker fees even though the law hasn't taken effect yet. A state-approved broker-fee ban was briefly in place in February 2020, just before the first Covid lockdown brought the rental market to a near halt. By the time renter demand began rising the next year, a court had struck down the state law and brokers were eager to capitalise on what quickly became a very competitive market where prices have continued to rise. The law could dramatically change the dynamics of the city's highly competitive rental market, where prices have soared since pandemic restrictions began easing in 2021. The median cost of new Manhattan leases was US$4,571 in May, reaching another all-time high, according to appraiser Miller Samuel and Douglas Elliman. Prices have also set records in the outer boroughs. BLOOMBERG
Hindustan Times
13-06-2025
- Business
- Hindustan Times
New York real estate industry appeals broker-fee case ruling
(Bloomberg) -- Real estate groups are challenging a ruling by a federal judge that allowed New York City to begin enforcing a new law requiring landlords, rather than their tenants, to pay fees for hiring listing brokers. US District Judge Ronnie Abrams on June 10 denied a request by the Real Estate Board of New York, the New York State Association of Realtors and others to pause the law while their lawsuit proceeds. The ruling was another setback for the industry's legal fight against the measure, which went into effect on June 11. The groups on June 12 filed an appeal of Abrams' decision to the US Court of Appeals for the Second Circuit. The City Council adopted the measure in November to end the longstanding practice of tenants being forced to pay costs incurred by landlords to hire the brokers who list their properties, which can add thousands of dollars to housing costs. The real estate industry argued the new law branded brokers as villains and would force landlords to raise rents to cover the costs of hiring them. New York City renters who settle on apartments that have broker fees pay an average of almost $13,000 to secure the keys to a property, which frequently includes thousands of dollars in fees for brokers hired by landlords to secure tenants, according to an analysis by StreetEasy released last year. Roughly 40% to 50% of listings on StreetEasy have required lease signers to pay the commissions of agents hired by their new landlords, which have typically ranged from one month's rent to 15% of the annual bill. The Real Estate Board contends that the law, known as Fairness in Apartment Rental Expenses Act, or FARE Act, interferes with exclusive agreements that landlords sign with brokers to list their properties and find tenants, in violation of the Constitution's bar against state laws impairing private contracts. It also argues the law violates the free-speech rights of landlords and brokers who publish real estate listings and then seek to receive compensation from tenants for the cost of the listing service. The industry's lawsuit alleges that the law will make rent-stabilized apartments too costly to operate and force landlords to raise rents to cover the cost of broker fees. The industry says tenants usually pay less over the life of a lease when commissions are paid separately, and that some are already refusing to pay broker fees even though the law hasn't taken effect yet. The law could dramatically change the dynamics of the city's highly competitive rental market, where prices have soared since pandemic restrictions began easing in 2021. The median cost of new Manhattan leases was $4,571 in May, reaching another all-time high, according to appraiser Miller Samuel Inc. and Douglas Elliman. Prices have also set records in the outer boroughs. The case is Real Estate Board of New York v City of New York, 24-CV-9678, US District Court, Southern District of New York (Manhattan). -More stories like this are available on ©2025 Bloomberg L.P.
Yahoo
13-06-2025
- Business
- Yahoo
Renters Face Sneaky Price Hikes in New York City
New York City renters know when it's time to find an apartment, it's always going to be an expensive venture. Even with a new broker-fee ban, it looks like renting will still be a costly option. The Fairness in Apartment Rental Expenses Act (FARE Act) went into effect on June 11 and does not allow a landlord's real estate agent to charge a fee to the tenants which was often 12-15 percent of the annual rent. That law will greatly reduce the costs for people to move into an apartment, but Bloomberg is pointing out how landlords are trying to find other ways to pass the costs onto their tenants by rolling it into their rent. On average, it costs a person $12,942 to move into a new apartment with a security deposit, first month's rent, and the dreaded broker fees, per StreetEasy. Now, that price is expected to average $7,537, it is a significant relief for those hoping to reside in one of the five boroughs. Still, the Real Estate Board of New York (REBNY) pushed back on the bill, and they are sending a warning to renters. "New Yorkers will soon realize the negative impacts of the FARE Act when listings become scarce, and rents rise. We will continue to litigate this case as well as explore our avenues for appeal," REBNY President James Whelan said, per ABC7 New York, in court after a judge denied their attempt to stop the FARE Act. History disagrees with REBNY though. Apartments with a broker's fee had "an average increase in rent around 5.3% compared to the rest of the market, which saw an increase of 4.6%, according to StreetEasy Senior Economist Kenny Lee. REBNY will continue to appeal the judge's ruling, but people are celebrating the financial relief in the housing sector. Living in New York City has always come with a premium price, but the FARE Act will make a Face Sneaky Price Hikes in New York City first appeared on Men's Journal on Jun 12, 2025
New York Post
10-06-2025
- Business
- New York Post
Apartment broker fee ban to begin Wednesday after federal judge nixes suit to stop the new NYC law
The city's new law banning broker fees will go into effect tomorrow, after a federal judge shot down a real estate lobby lawsuit to block the ban. Judge Ronnie Abrams ruled Tuesday that a federal lawsuit challenging the Fairness in Apartment Rental Expenses Act was mostly rooted in policy disagreements — not constitutional questions. 3 A new law banning broker fees starts tomorrow after a federal judge tossed a last-minute effort to pause the ban. Helayne Seidman 'Plaintiffs' discontentment with the Act, however, stems not from its effects on their constitutional rights, but from a fundamental disagreement with its underlying policy,' Abrams ruled. Her decision tossed all but one claim from the lawsuit, and denied a request to pause the law as the case plays out. The FARE Act — passed in City Council with a veto-proof majority of 42-8 on Nov. 13 — prohibits agents representing property owners from charging prospective renters a 'broker fee.' 3 The Real Estate Board of New York and other groups claimed that banning broker fees would 'destroy' the rental market, according to their suit. Helayne Seidman The lawsuit, filed a month later by the Real Estate Board of New York, a broker's association and various property groups, claimed that banning broker fees would 'destroy' the rental market. Abrams said the suit was asking 'the court to act as a 'superlegislature'' to nix laws they disagree with. 'The court declines that invitation,' Abrams wrote, adding that the 'remedy is through the political process, not in court.' 3 Judge Ronnie Abrams said the suit was asking 'the court to act as a 'superlegislature'' to nix laws they disagree with. Kbarnofsky/Wikipedia But while the judge said the act could result in higher prices for landlords, they were better positioned to absorb the cost by increasing rents. 'Tenants, by contrast, cannot pass the cost of brokers' fees to landlords,' she wrote. REBNY President James Whelan said he was 'disappointed' that their motion to pause the law was kiboshed. 'New Yorkers will soon realize the negative impacts of the FARE Act when listings become scarce, and rents rise. We will continue to litigate this case as well as explore our avenues for appeal.'
Time Out
09-06-2025
- Business
- Time Out
A new rental law is going into effect on Wednesday—here's what to know
New York renters, rejoice—or at least take a deep breath. Starting Wednesday, June 11, the long-dreaded broker fee may no longer be your financial burden. That's when the FARE Act, short for Fairness in Apartment Rental Expenses, goes into effect, flipping the script on who pays the often astronomical broker fees in New York City's rental market. The rule is simple: If a landlord hires a broker, the landlord pays the broker. If you hire a broker, you pay. That's it. No more shelling out $5,000 (or more) to someone you never hired just to snag a 500-square-foot walk-up in Alphabet City. Of course, this is New York, so things are complicated. The Real Estate Board of New York is still fighting the law in court, arguing it violates free speech and contract rights. But unless a judge intervenes at the eleventh hour, the FARE Act is happening, and the city's Department of Consumer and Worker Protection is locked and loaded with fines. Brokers who break the rules could be hit with penalties starting at $750 and going up to $2,000. Renters, meanwhile, should see some relief. StreetEasy estimates that average upfront costs could drop by nearly 42%, from around $13,000 to $7,500. That could mean more people can move—and move more often. But don't break out the Champagne just yet. Landlords are already adjusting. According to Curbed, some are raising rents, like the Clinton Hill owner who upped a one-bedroom from $3,200 to $3,600 on June 1. Others are cutting brokers out entirely and relying on word-of-mouth to fill units. A few seem ready to do the unthinkable: Talk to prospective tenants themselves. Still, experts say the doom-and-gloom predictions may be overblown. Many property managers already offer no-fee rentals and are used to absorbing those costs. And contrary to broker panic, nearly 57% of no-fee listings this year were still represented by agents, according to StreetEasy data. Bottom line: This law could inject some sanity into the city's rental market. Transparent pricing, lower barriers and fewer surprise fees won't create utopia. Still, it is very New York to need legislation just to avoid paying someone for doing something you never asked them to do in the first place.
