NYC FARE Act 2025: Whoever Hires the Broker Pays the Broker, Not the Tenant
by Platuni | 06 Oct, 2026 | 5 mins read
Platuni
06 October, 2026
5 mins read
1. Why the core rule is simple but its application isn't
The baseline rule is straightforward: whoever hires the broker pays the broker.
[Cite: NYC Local Law 119 of 2024]
Applying that rule requires first determining who actually hired the broker in a given listing, which is where the law's presumption framework, discussed next, does the real work.
2. Why the landlord-hired presumption matters most
A listing agent who publishes an apartment with the landlord's permission is presumed to be acting on the landlord's behalf, and that presumption is rebuttable rather than absolute.
[Cite: NYC Local Law 119 of 2024]
A landlord or agent who wants to avoid this presumption needs to be able to show the broker wasn't actually acting with landlord authorization; absent that showing, the presumption controls and the fee falls to the landlord.
3. What still allows a tenant to pay a broker
Tenants remain free to independently hire and pay their own broker, and a tenant-hired broker can advertise their services without violating the law.
[Cite: NYC Local Law 119 of 2024]
The distinction turns on who initiated the broker relationship; a broker can't condition access to a specific unit on being hired by the tenant, since that would effectively recreate the landlord-fee arrangement the law is meant to stop.
4. What the pre-lease disclosure requirement demands
Before a lease is signed, landlords must provide tenants with an itemized written disclosure of all fees required to rent the unit, covering every mandatory charge except background and credit check fees.
[Cite: NYC Local Law 119 of 2024]
A landlord who discloses only the base rent and broker fee status, without itemizing other mandatory charges such as an application fee or amenity fee, hasn't met this disclosure requirement in full.
5. Why advertisements carry their own disclosure obligation
Advertisements for a unit have to display all mandatory fees in a clear and conspicuous manner.
[Cite: NYC Local Law 119 of 2024]
That listing-level requirement means the disclosure obligation doesn't wait until lease-signing; a prospective tenant is supposed to see the full mandatory-fee picture at the point they're first evaluating the unit, not only after they've decided to apply.
6. Why background and credit check fees stay outside this framework
The law specifically carves out background and credit check fees, which remain permissible regardless of who hired the broker or what the fee-disclosure rule otherwise requires.
[Cite: NYC Local Law 119 of 2024]
A landlord charging a standard screening fee for these checks isn't violating the FARE Act by doing so; this exemption is narrow and specific to that category of charge.
7. How this law is enforced
Violations are enforced through the Department of Consumer and Worker Protection, with civil penalties and potential restitution for fees collected in violation of the law; private lawsuits are also permitted.
[Cite: NYC Local Law 119 of 2024]
A tenant who was charged a landlord-hired broker's fee in violation of this law has more than one avenue to pursue restitution, which gives this rule real enforcement teeth beyond agency action alone.
8. Why pre-June 11, 2025 agreements need separate handling
Contractual obligations entered into before the law's June 11, 2025 effective date may carry limited, distinct protections that this article doesn't fully resolve.
[Cite: NYC Local Law 119 of 2024]
A landlord or broker with a listing agreement or lease negotiation that predates this effective date should get a direct legal read on how that specific agreement is treated, rather than assuming the new rule applies retroactively or that the old arrangement is automatically grandfathered in.
9. Why listing platforms and individual landlords share compliance responsibility
Since both the advertisement-level disclosure rule and the lease-signing disclosure rule apply, a landlord using a third-party listing platform still bears responsibility for making sure mandatory fees are clearly displayed wherever that listing appears.
[Cite: NYC Local Law 119 of 2024]
A landlord who submits incomplete fee information to a listing platform, or fails to confirm the platform displayed it correctly, is still the party accountable if the advertisement doesn't meet the clear-and-conspicuous standard.
10. Why this changes standard leasing workflows, not just one fee line item
Beyond the broker fee rule itself, the itemized disclosure requirement touches every mandatory fee in a lease transaction, which means leasing paperwork and advertising templates built before June 11, 2025 likely need a full review, not just a broker-fee-specific edit.
[Cite: NYC Local Law 119 of 2024]
A property management company updating its process for this law should treat it as a broader disclosure overhaul across listings and lease paperwork, rather than a narrow fix limited to who pays the broker.
11. What property managers should do now
The practical starting point is auditing every active listing and lease-signing packet to confirm all mandatory fees are itemized and disclosed, separate from the broker-fee question itself.
For any listing using a broker, documenting clearly whether that broker was hired by the landlord or independently by the tenant creates a record that supports the correct fee allocation if that determination is ever challenged.
Frequently asked questions
Who pays the broker fee under the FARE Act?
Whoever hires the broker. If the landlord hired the broker, the landlord pays; a tenant can still choose to hire and pay their own broker independently.
When did the FARE Act take effect?
June 11, 2025, under NYC Local Law 119 of 2024.
What does the pre-lease disclosure requirement cover?
An itemized written disclosure of all mandatory fees required to rent the unit, provided before the lease is signed, excluding background and credit check fees.
Are background and credit check fees affected by this law?
No. Those fees remain permitted regardless of this law's other requirements.
How is this law enforced?
Through the Department of Consumer and Worker Protection, with civil penalties and restitution available, as well as private lawsuits.
Does this apply to a broker the tenant hired independently?
No. A tenant can still freely hire and pay their own broker; this law addresses landlord-hired brokers specifically.
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