When New York State ruled late Tuesday that charging broker fees to renters is now illegal, some in the industry immediately predicted some landlords would themselves pay the broker fee and pass on the cost to tenants by raising asking rents.
Two days later, that prediction has already come to pass. Take, for example, this studio apartment for rent in Brooklyn Heights.
On Wednesday, agent Lisa Sulfaro of Corcoran listed the unit, #15B, on the top floor of a five-story walkup at 118 Montague Street, for $1,700 a month. The listing noted the price is “the least amount you could expect to pay for a studio in this part of the world!”
It also specified “Broker fee: 15% of the annual rent.” Today, the listing was updated. The mention of the broker fee was deleted. The rent is now $2,000 a month.
Landlords and renters can opt to hire brokers or do a search on their own. Industry watchers predict the new rule could push New York City closer to being a no-fee apartment market — similar to most cities throughout the U.S. — and threaten the livelihood of rental-focused agents and firms.
The Tuesday ruling is an interpretation by state regulators of the Tenant Protection Act passed in 2019 by the New York State legislature. Tuesday’s guidance was a clarification of existing law.
[Photo via The Corcoran Group]
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