City Lawmakers to Try to Make Landlords Pay Residential Broker Fees

State lawmakers are also gearing up to ban the fees.

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Another bill to pass residential broker fees in New York City onto landlords may be up for discussion, with City Councilman Chi Ossé expected to introduce legislation on Thursday, according to The Real Deal.

The Real Estate Board of New York (REBNY) circulated an email among its members warning that Ossé plans to cut into commissions, calling on roughly 12,000 of its members to reach out to their representatives in City Hall to curb the law, according to the organization. Up to 1,100 emails were sent within the first two hours of notification.

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While the exact details of the bill are scant, it is expected to stop broker fees — often one month’s rent or 15 percent of the lease — from being paid by tenants and instead be paid by the company that hired brokers to handle the apartment listing, according to a spokesperson for Ossé. The bill would not cap the amount of fees brokers can charge, the spokesperson added.

“There is no bill to cap brokers fees. We are introducing a bill, however, that would obligate whichever party hired the broker to then pay the fee,” the spokesperson said in an email. “So, if a tenant finds an apartment without the help of a broker and the landlord contracted a broker for their services, the tenant would not be responsible for the fee.”

REBNY wrote in the email that the change in broker fee payments would “senselessly harm working-class New Yorkers.”

“Instead of dealing with the housing crisis, this bill is a wasteful distraction that does far more harm than good,” the REBNY email read. “The legislation wrongly punishes real estate agents for a housing shortage and rising rents they did not create, while falsely claiming it will also improve the home search process for renters.”

In 2019, the New York City Council attemptedt to curb what it viewed as exorbitant broker fees with legislation from Councilman Keith Powers to cap fees at one month’s rent, which went through the chambers of City Hall in 2019 before being struck down in court. A push to eliminate commissions was revived again in September 2022, Gothamist reported at the time.

Even at the state level, lawmakers are taking swipes at broker fees with Assemblyman Zohran Kwame Mamdani’s bill introduced in Albany in late February to ban landlords, lessors, sub-lessors and grantors from demanding commissions. The legislation passed the Assembly’s Judiciary Committee in early June.

Mark Hallum can be reached at mhallum@commercialobserver.com.