The FARE Act: What It Changed for Brooklyn Owners

For decades, a New York renter paid the broker who worked for the landlord. It was one of the least defensible customs in American housing, and it was completely normal here.

That ended on 11 June 2025, when the Fairness in Apartment Rental Expenses Act — Local Law 119 of 2024 took effect. The City Council passed it on 13 November 2024, with 42 of the 51 members voting in favor.

The rule is one sentence long in substance: whoever hires the broker pays the broker.

What that means when you list a vacancy

If you engage a broker to market your apartment, you pay that broker. A broker representing the landlord cannot charge a fee to the tenant — and that expressly reaches a broker who publishes a listing with the landlord's permission, which closes the obvious workaround of "the listing agent isn't really my broker."

A tenant who goes out and hires their own broker to represent them still pays that broker. Tenant-side representation is untouched.

What you cannot do is re-route the payment. If the broker is working for you — marketing your unit, publishing your listing, running your showings — the fee is yours no matter whose check it comes out of. The agency relationship governs, not the invoice.

The relationship is also documented at the outset by operation of law: Real Property Law §443 requires a broker to provide an agency disclosure form at first substantive contact with a prospective tenant. A broker who hands a renter a form saying they represent the landlord, and then invoices that renter, has created the evidence of the violation themselves.

The litigation, since owners keep asking

The Real Estate Board of New York sued to block the law, and there has been enough coverage of the challenge that some owners are still treating the FARE Act as provisional.

It is not. In July 2026, the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of REBNY's claims that the law violates the First Amendment and is preempted by state law. REBNY has said it is disappointed and will explore further avenues.

The practical reading: the law is in effect, it has now survived appellate review on its central constitutional claims, and building a leasing budget around a repeal is not a plan. If the position changes, it will change prospectively and you will have notice.

The penalties

Enforcement sits with the Department of Consumer and Worker Protection, with hearings at OATH. Reported penalties reach up to $2,000, and a violator may additionally be required to refund fees improperly charged.

Confirm the current penalty schedule with DCWP before budgeting against these figures. The schedule went through its own rulemaking and is the sort of number that gets adjusted.

What actually changed for an owner's economics

The honest framing is not that owners now pay a fee they did not pay before. It is that a cost which was always part of filling a vacancy stopped being invisible.

Using a broker is now a priced decision. When the tenant paid, engaging a broker cost the owner nothing directly, so nearly every owner did it, whether or not the broker added value on that particular unit. Now the question is real: what does the broker actually do for this vacancy, how much faster does the unit fill, and is the difference worth the fee against listing, showing and screening in-house.

For a well-located Brooklyn unit in a strong season, many owners have concluded it is not. For a hard-to-let unit, an unusual layout, a walk-up top floor in February, or an owner living out of state, a good broker still earns the fee comfortably.

Repricing is available on market units and not on stabilized ones. Free-market owners can and did adjust asking rents. On a rent-stabilized unit you cannot: the legal regulated rent is set by the registration and the applicable guidelines, and a broker fee is not a permissible addition to it. Reasoning from a market unit to a stabilized one is a genuinely dangerous move here, and it is worth saying plainly because it is the mistake most likely to follow from this law. If you own stabilized units, take that question to counsel rather than to a spreadsheet — the site's rent stabilization guide covers why the legal rent is not something an owner adjusts at will.

Screening got more important, not less. If you are paying to fill the unit, filling it with the wrong tenant costs you twice. The economics now reward getting the screening right the first time and reward accurate pricing that fills the unit without a second listing cycle.

Where a managing agent sits in this

The FARE Act quietly changed what an owner should expect from management on leasing. When the fee was the tenant's problem, an agent handing every vacancy to an outside broker cost the owner nothing. Now that arrangement has a price attached, and it is fair to ask what it buys.

We handle leasing and tenant placement directly — listing, showing, screening and lease execution — rather than routing every vacancy out to a broker and passing the cost along. That was a reasonable way to work before June 2025 and it is a materially better one now.

If you have a vacancy coming and are not sure whether a broker is worth the fee on that specific unit, schedule a consultation or call 718-568-9278. We will give you a straight answer about that apartment rather than a general rule.

This article is general information, not legal advice. It reflects Local Law 119 of 2024 and the litigation position as of August 2026. Penalty amounts and enforcement practice may change, and rent-stabilized units raise questions this page does not answer. Confirm specifics with DCWP and a qualified New York attorney.