- Glossary
- /Broker Fee
NYC rental glossary
Broker Fee
The commission paid to a rental broker — now, under the FARE Act, owed by the party who hired the broker.
A broker fee is the commission a rental agent earns for placing a tenant, traditionally a percentage of the annual rent or a flat number of months’ rent. For decades in New York City, the renter routinely paid it even when the landlord had hired the broker.
The FARE Act, effective in 2025, changed the default: the party who engaged the broker pays the fee. On a landlord-listed apartment that means the landlord owes it, and charging the tenant is prohibited unless the tenant retained the broker or a written agreement allocates the cost. Listings must disclose any fee the tenant would owe.
Because the fee-payer is now a compliance fact, brokerages capture who paid on each closed deal — and keep a written agreement on file in the cases where the tenant legitimately pays.
Related terms
- FARE ActA 2024 NYC law shifting the broker fee to the party who hired the broker — in most listings, the landlord.
- Net Effective RentThe average monthly rent after spreading a concession (free months) across the lease term — lower than the gross rent.
- ConcessionA landlord incentive — usually free months — that lowers a tenant’s effective rent without cutting the face rent.
- Security Deposit (NYC limit)Under HSTPA, a residential security deposit in New York is capped at one month’s rent, with strict return rules.
This definition is general information about a New York City rental or rent-regulation concept, not legal advice. The rules change and often turn on facts specific to a building, unit, and tenancy — confirm the current rule and consult a qualified attorney before acting on any individual matter.