On November 13, 2024, the Fairness in Apartment Rentals Act (FARE) (the Bill) was approved by the New York City Council (City Council) prohibiting the imposition or collection of any fee or commission for the rental of residential real property. The Bill will also require landlords to disclose the fees that a tenant is required to pay in the rental listing and rental agreements. Violations of the Bill would subject a person to civil penalty. The passing of the Bill by a 42 to 8 majority of the City Council vitiates a veto, notwithstanding that Mayor Eric Adams has been a critic of the Bill. Accordingly, the Bill will take effect 180 days after it becomes law.
The Bill will put an end to the practice of residential brokers passing their brokerage fees through to tenants. Such fees are usually 15 percent of the annual rent payable during the first year of the applicable lease and have typically been paid by tenants as part of the leasing process. While the intended purpose of the Bill is to reduce amounts payable by residential tenants, it is likely that one of the unintended consequences of the Bill will be that some landlords will increase the rent charged to residential tenants in order to recoup amounts that will now be paid by landlords in the leasing process, to the extent that the rent stabilization laws (if applicable) permit such an increase.
Key Requirements…