Compliance guide
For decades, the standard NYC rental fee model put a one-month-or-more broker fee on the tenant — even when the broker worked for the landlord. The FARE Act changed that. As of June 2025, a broker hired by the landlord generally can't pass that fee to the tenant. The statutory presumption is now landlord-paid. Here's what the law requires and how brokerages stay on the right side of it.
The Fairness in Apartment Rental Expenses Act (the FARE Act) is a New York City local law that took effect on June 11, 2025. It reassigns responsibility for the residential broker fee away from the tenant in the common case where the broker is working on the landlord’s behalf, and it adds up-front disclosure requirements so a renter knows what they will owe before they apply.
The Act is enforced by the NYC Department of Consumer and Worker Protection (DCWP). It applies to residential rentals in New York City.
A landlord-hired broker can't charge the tenant the fee.
The practical effect: the “15% of annual rent” or “one month’s rent” broker fee that historically landed on the tenant in a typical listing now defaults to the landlord. The statutory presumption is that the fee is landlord-paid.
The right way to think about it is: the party who hired the broker pays the broker. The FARE Act doesn’t ban broker fees — it bans shifting the landlord’s broker fee onto the tenant.
The edge case that demands care is a fee the tenant agrees to pay. A tenant-paid (or split) arrangement is lawful only when there is a genuine, written tenant-broker agreement reflecting that the broker was working for the tenant — not a landlord-hired broker repackaging the fee.
How Urbero models this.
Beyond reassigning the fee, the FARE Act requires transparency about what a renter will owe. In broad strokes:
The Act does not eliminate legitimate, separately authorized charges (for example, an application or background-check cost is governed by its own statewide rules). What it targets is the landlord’s broker fee being charged to the tenant.
The FARE Act is enforced by NYC DCWP. A renter who is improperly charged a landlord’s broker fee can file a complaint, and violations can carry penalties. For a brokerage, the operational risk is less about a single fee and more about a pattern: charging tenants the landlord’s fee as a matter of practice creates repeat exposure across every deal.
This is exactly why recording the fee-payer posture on every closed deal — with the landlord-paid default and a gated, audited exception — turns a compliance question into a clean paper trail you can show on demand.
You’re the landlord’s broker. You cannot charge the renter your fee — the landlord pays it. The deal records as landlord-paid by default.
Here the tenant engaged you directly. A tenant-paid fee can be lawful, but you need a written tenant-broker agreement establishing that relationship — and you record the deal as tenant-paid with that acknowledgment, not as a default.
Each side’s broker is paid by the party who hired them. The landlord’s broker can’t bill the tenant; the tenant’s broker can be paid by the tenant under their agreement. Document the arrangement so it’s clear which broker each side engaged.
