What exactly is a broker fee? To New York City residents, it is a term that conjures up memories of great pain. Before moving into a new apartment in New York City, a tenant must pay thousands of dollars in fees to a real estate broker, regardless of whether or not they even utilized the services of this individual in any substantial way. Often, said real estate broker is put in place by the property owner and has little-to-no interaction with the renters themselves. The broker fee is a large one-time payment that must be made prior to moving into a new rental residence.
While pretty much every other city in the US sees the property owners covering the commission of any and all agents working on their behalf, sensibly, New York City is the exception. In NYC, broker fees have long been an unavoidable obstacle. But maybe not for much longer. New legislation that is being backed by a majority of the New York City Council would change all of that, forcing New York City property owners to adhere to the same standards as those in the rest of the US and cover any brokerage fees themselves rather than passing it off to tenants.
Seeing as NYC, which has one of the most expensive housing markets in the entirety of the country, is also primarily made up of renters (more than two-thirds of the city’s population are renting their residence), it only makes sense to reduce the already substantial financial burden on these individuals. Many are praising this new legislation and the good it could ultimately do for the city’s struggling economy and communities. At a hearing related to the legislature, numerous New York City renters showed up to profess their long-held hatred of broker fees, with many saying they had never even met the real estate broker prior to being forced to pay for their services and never saw them again after.
Agustina Velez, a renter who said she recently had to pay $6,000 to move into a new apartment, said, “In most businesses, the person who hires the person pays the person. Enough with these injustices. Landlords have to pay for the services they use.”
While renters are rallying behind the legislation, the New York real estate industry is decidedly less pleased with the idea of being forced to cover these fees themselves. Numerous brokers have come forward to voice their outrage to the Real Estate Board of New York, claiming that putting such financial demands on them would only lead to higher fees being implemented upon renters elsewhere and suggesting things were better left as they were. “This is the start of a top-down government-controlled housing system!” claimed one broker
City Councilman Chi Ossé, the sponsor of the legislation, said he was moved to enact the bill following his own recent apartment search. Ossé said that he found this to be “tiring” and voiced his displeasure at being forced to bay broker fees that he felt were “treacherous and competitive.”
