- The Real Estate Board of New York (REBNY) and others sued to block a new NYC law requiring landlords, not tenants, to pay brokers’ fees, arguing it violates constitutional rights and disrupts private contracts.
- Industry groups claim the rule, set to take effect June 11, will raise rents and hurt housing affordability, while the city argues it will ease financial burdens for tenants.
- The median Manhattan rent remains near record highs, intensifying the stakes as both sides await a ruling from US District Judge Ronnie Abrams.
The Real Estate Board of New York and several other organizations asked a federal judge to block a new New York City law that shifts broker fees from tenants to landlords. The city council passed the regulation in November, and it is set to go into effect on June 11 unless the court stops it,per Bloomberg.
A New Front in the Housing Battle
At a hearing Friday, REBNY’s lawyers argued that the law violates constitutional protections, including the contracts clause and free speech rights. They said the rule disrupts longstanding agreements between landlords and brokers and could harm the rental market.
City attorneys defended the law, saying it would ease affordability problems in a market where renters often pay nearly $13,000 upfront. They argued the current system disproportionately harms low- and middle-income tenants, especially people of color.
The Details
Historically, landlords hired brokers and passed their fees—sometimes 15% of annual rent—to tenants. A StreetEasy analysis found that half of New York City’s rental listings include these fees. By forcing landlords to cover the cost, the city hopes to reduce renters’ upfront expenses.
Landlords argue they will respond by raising rents. They also warn that operating rent-stabilized buildings will become more expensive, possibly reducing the supply of affordable apartments.
The lawsuit claims brokers will need to restructure their businesses. Many could lose money or leave the industry if they can’t collect fees directly from tenants.
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Why It Matters
If the law moves forward, it could transform New York City’s rental market. Apartments might become more accessible, but long-term rents could climb. New York and Boston remain the only major US cities where landlords routinely pass broker fees to tenants.
Tenant advocates argue that cutting large upfront costs would improve mobility and opportunity, especially for low-income renters.
What’s Next
Judge Ronnie Abrams has not said when she will rule. Both landlords and tenants are preparing for possible changes that could reshape the rental landscape.
As housing affordability pressures continue, the outcome of this case could have a lasting impact on New York City’s rental market.
