REBNY sues over new commission rules for NYC brokers
The Real Estate Board of New York told a federal court that rules limiting how agents are paid will make it harder for renters to find apartments.
New York City has approved new rules limiting broker fees, but the industry isn't done fighting.
The Real Estate Board of New York (REBNY) filed suit this week, arguing in Manhattan federal court that the Fairness in Apartment Rental Expenses Act, aka the FARE Act, will "effectively eliminate" brokers' ability to advertise open rental properties, Law.com reported.
What is the FARE Act? The FARE Act ends the longstanding practice of landlords hiring agents to help them fill vacancies — and requiring tenants to pay those agents for that work, to the tune of 10-15% of the annual lease amount.
Those who favor the FARE changes say they will make apartments more affordable in a city where it's not unusual for a renter to have to cough up $10,000 or more for a typical one-bedroom unit.
REBNY, which represents 14,000 real estate professionals in New York City, says consumers will have a harder time accessing available apartments if brokers aren't able to advertise them as they have been (with tenants paying, even though they didn't hire said brokers).
What's next? The new rules are set to take effect in June 2025. Between now and then, REBNY plans to keep rallying real estate professionals and their allies to the cause and pursue their case in federal court.
How this ties into the bigger picture of commissions: This rental fee battle is unique to New York City, but Slate's coverage of summer protests against FARE connected local opposition to rental fees to the broader issue of broker pay.
Slate said last year's jury verdict against NAR was based on "collusion to artificially inflate real estate fees" and noted that the NAR settlement will "end the customary 6% take for Realtors." President Biden's war on "junk fees" and Department of Justice efforts to investigate NAR were also highlighted as related issues.