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.
Broker fees 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.
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 fees 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.
What next for tenants?
All may not be lost for tenants as there’s still a chance for laws which could limit the amount paid by tenants as commission. Until then, tenants can do the following to avoid paying broker fees or any fee at all
- Negotiate with broker for lower fees
- Try to reach out to landlords directly
- Ask family and friends to help in your search,