New York City has been one of the most expensive places to rent or buy real estate for years, and a major cause of expense for residents is all the fees associated with selecting a place. Traditionally, landlords have been able to demand that tenants pay the fee for the broker who facilitates the transaction, even if the tenant was not the person who hired the broker. Due to these fees, a person could have to pay up to $4,500 upfront just to rent a $2,500 a month apartment. However, this is all set to change with a new law.

The Department of State has recently published a set of real estate forms meant to be more friendly to tenants. One of the big changes in their ruling has been that tenants are no longer required to pay brokers fees for landlords. This was definitely good news for people, but there was still a little confusion surrounding the whole issue. Therefore, Erin McCarthy, spokesperson for the DOS, issued a statement offering more clarification on the ruling.

As McCarthy explains, brokers who help a landlord with their real estate transaction cannot pass on that fee to tenants. Instead, the landlord will be required to pay the broker’s fee themselves. The only exception to this rule will be if the prospective tenant was the person who hired the broker in the first place. Tenants are instructed to cite this ruling if they are trying to find an apartment, and the landlord tells them they must pay broker fees. 

Proponents of tenants’ rights in New York hailed the ruling as a win. Even if this causes landlords to increase their rent price overall, it will mean tenants can see an upfront cost instead of being surprised by hidden fees. Unfortunately, it may take a little more effort for the more tenant-friendly rules to become a reality because brokers feel they will lose business if landlords have to pay to hire them. The Real Estate Board of New York and several brokerages have filed a lawsuit against the change in rules with the Albany County Supreme Court. Until the case is settled, a judge has temporarily blocked the DOS ruling from going into effect.