New York City is a great place to live whether for the fun and pleasure it provides or if you’re looking to settle and raise a family. Whichever the intent, you will find the services of a real estate broker come in handy and these NYC broker fee laws information will apply in your search for a house or apartment to rent in New York or if you are considering becoming a real estate agent in the city of lights.
Who is an NYC broker?
A broker is an expert of the real estate market with in depth knowledge of state real estate laws and lease terms and apply this knowledge to help your search for a property to rent or buy easier.
NYC broker fee laws guide the commissions real estate brokers in New York can charge their clients when they connect them their preferred accommodation.
Broker fee NYC
Traditionally, Tenants have had to bear a broker’s commission which state regulations limit to between 0.3-15% of the total rent due for the 1st year according to the NYC broker fee laws.
This regulation didn’t consider whether the broker was contracted by the Tenant or the landlord.
But new guidelines introduced by the department of state in 2019 sought to protect the interests of Tenants, effectively making sure that landlords were the ones to pay the brokers they contract to help sell or rent out their property.
Tenants, however were to pay broker commission or fees if they contracted the services of the broker.
As a work around, brokers who were “Landlord’s agent” insisted tenants sign a declaration form, stating they represent them in order to charge the tenant a commission.
Are broker fee legal in NYC ?
Disgruntled real estate industry in concert with New York local brokers filed a case against the new guidelines which made it illegal for tenants to pay broker fees.
State Supreme Court Judge Susan Kushner, in a ruling in April 2021, said the order prohibiting brokers from charging commission from tenants was illegitimate, null and void as the Tenant Protection Act of 2019 doesn’t explicitly mention broker’s commission. The ruling further prohibited the DOS from enacting further laws to force Landlord’s to pay the commission instead of Tenants.
How can I avoid paying broker fees in NYC?
To avoid paying broker fees, you must avoid using brokers in your home search. Home seekers/renters can do the following to avoid paying broker fees.
- Try to reach out to landlords directly
- Ask family and friends to help in your search.
Also if avoiding broker fees is not viable in your situation, remember you can always negotiate with your broker for lower fees.
However, all may not be lost yet for tenants as there’s still a chance for the introduction of new NYC broker fee laws or amendments to the current laws which could remove broker fees or reduce the amount tenants pay as commission to brokers.
How expensive is rent in New York?
New York is a major US city, and therefore accommodation in the best neighborhoods are quite expensive. Data from RentHop shows that the cheapest studio apartment in New York costs about $1700 in areas like Washington Heights and $2,975 in areas like Chelsea per month.
A one bedroom apartment will cost about $1,700 in a neighborhood like Fort George and up $4,000 in Lincoln Square per month in rent.
For a two bedroom apartment, the area offering the cheapest rent is Southwestern Brooklyn at a monthly rent of $2,000 while $6,250 can get you one in a Lincoln square.
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