The Early Impact of the FARE Act in New York City

Since the Fairness in Apartment Rental Expenses (FARE) Act took effect on June 11, Dwellworks and our specialty real estate brokerage business, Station Cities, have kept a close watch on market conditions across the city and its impacts to tenants, especially new arrivals unfamiliar with New York. Here is an overview of the latest developments 45+ days after implementation of the law. 

A Spike in Rents and a Decrease in Listings

Rent Hikes: Most analysts expected landlords to raise their rents to cover their new costs, since they are now legally obligated to compensate the broker representing their interests. Previously, in most instances, the tenant paid this cost. While there was a ‘day one’ spike in rents in mid-June (with some sources reporting an increase of 15% vs the previous month’s rent), most sources are reporting an increase of approximately 5-10%. We will continue to monitor and provide updates as the rental market absorbs this impact and conditions stabilize going forward.

Current Average Rental Price: Rental data fluctuates in this very active market. The 1-bedroom rental average rate across Manhattan for July is $4025, per apartments.com. Note in highly desirable areas like Chelsea or Tribeca, the average rates are higher, over $5000/month.

Reduced Listings: The immediate reaction to FARE taking effect was fewer available listings, as brokers pulled listings off the market and reviewed terms with landlords. Manhattan saw a 35% drop in new listings after the go-live date of the FARE Act on June 11, marking the lowest number of posted listings in over a decade. Most experts see this fluctuation in listings as a repositioning period not a permanent reduction in available apartments. There has been no noticeable pullback in demand, as renters continue to move into the New York City market.

Landlord Shifts in Marketing: Some landlords are opting to market their properties directly, without signing broker listing agreements. Although there is nothing stopping a prospect tenant from deciding to look on their own for a rental property, this is not recommended. Without licensed representation, tenants will be underrepresented in negotiations and protecting their interest. 

Unlicensed salespeople are prohibited by law from providing support that would be characterized as a real estate function. A licensed Tenant’s Agent provides exclusive representation which includes the following duties:

• Representing Tenant's Interests: A tenant's agent is solely dedicated to the tenant's needs and objectives, unlike a landlord's agent who represents the landlord's interests. 
• Negotiating Lease Terms: They negotiate the rental price, lease duration, and other terms of the agreement to secure the best possible outcome for the tenant. 
• Providing Market Expertise: They offer insights into rental rates, property values, and market trends to help the tenant make informed decisions. 
• Facilitating Communication: They act as a liaison between the tenant and the landlord, or the landlord's agent, handling communication and addressing concerns. 
• Ensuring Legal Compliance: They ensure that all aspects of the lease agreement and the rental process adhere to relevant laws and regulations. Leases in NYC can be as long as 80+ pages.
• Managing Paperwork and Documentation: They assist with the application process, lease preparation, and other necessary paperwork. 
• Scheduling Viewings and Showings: They arrange property viewings and may also coordinate transportation for the tenant. 
• Offering Advice and Guidance: They provide advice on tenant rights, responsibilities, and other relevant aspects of the tenancy. 
• Following Up on Maintenance Issues: They may assist in facilitating communication and resolution of maintenance requests and repairs. 
• Protecting Tenant's Confidentiality: They maintain confidentiality regarding the tenant's information and financial status. 

   

Note: Based on New York real estate laws, unlicensed salespeople are prohibited from performing several key activities:

1. Listing properties for sale or rent
2. Selling, exchanging, or renting real estate
3. Negotiating real estate transactions
4. Collecting rent for the use of real estate
5. Negotiating loans secured by real estate mortgages
6. Showing properties to potential buyers or tenants
7. Discussing terms of transactions or providing advice on real estate matters
8. Receiving commissions or fees for real estate transactions

Engaging in these activities without a license is considered a misdemeanor in New York. Unlicensed individuals can face penalties, including fines and, in some cases, criminal charges. The New York Department of State has the authority to investigate and enforce these regulations.

Commissions for Tenant Representation: Each agent receives compensation from the party that they represent. Tenant representation commission continues about 12-15% of annual rent. 

What Should Tenants Expect?

Increased Competition: Increased demand is creating heightened competition and rising rents. Bidding wars are becoming more common. In Brooklyn, nearly 32% of tenants ended up in bidding wars, a significant increase from previous years.

Hidden Fees: In an attempt to circumvent the ban on tenant-paid listing fees, some landlords and brokers are reportedly introducing new fees labeled as "management" or "technology" fees, which can total up to $4,200. These fees are being challenged and if found to be illegal, will result in penalties for the landlord.

An Open Court Case, While the City Enforces the New Law

Ongoing Litigation: The Real Estate Board of New York (REBNY) has filed lawsuits challenging the FARE Act, arguing that the Act limits their free speech rights to promote listings and that the Act leads to higher rents and fewer listings. While New York State courts have so far upheld the law, an appeal by REBNY is in progress with the District Court

Enforcement Measures: The New York City Department of Consumer and Worker Protection (DCWP) is actively enforcing the law. Violations can result in fines up to $2,000 per instance. The DCWP has received over 600 complaints regarding non-compliance since the law went into effect on June 11.

Dwellworks Guidance for Renters

Obtain Professional Help through Licensed Tenant Representation: It is critically important to consider hiring a licensed real estate agent to represent you as a tenant. Tenant-brokers such as Dwellworks Station Cities can help renters find properties more effectively, by reaching out directly to landlords, questioning hidden fees, vetting standard lease terms, and negotiating more effectively as subject matter experts—especially in today’s volatile market. Licensed professionals are bound by fiduciary duties and real estate law to represent the interests of their customers. Tenant brokerage services are a valuable resource in an environment where some landlords and listing agents may fail to cooperate with or attempt to circumvent new legal requirements.

Know the Facts: All renters should familiarize themselves with the provisions of the FARE Act HERE.

Count on Us for Objective Updates: The market is fast moving and there are many perspectives being represented. As agents for our clients and acting in the interest of relocating employees, Dwellworks and Station Cities will filter for the facts and provide the best on-the-ground assessment and recommendations for renting the New York City market under the terms of the FARE Act.

Some Additional Background on the FARE Act 

What is the FARE Act?

The Fairness in Apartment Rental Expenses (FARE) Act was passed by the New York City Council in November 2024 to address the issue of who pays real estate broker fees in the city’s rental market.

The FARE Act shifts the responsibility of paying broker listing fees and broker finder fees from tenants to the party who hires the broker. For listing fees, this is typically the landlord. For tenant search/finder fees, this is typically the tenant. The law, which went into effect on June 11, 2025, applies to any instances where the landlord has hired a real estate agent/broker, but not to the co-brokering fee of other agents showing the property, and specifically, brokers acting in the interest of the tenant. Tenant Representation is the service offered by Dwellworks and our brokerage, Station Cities, and is described in greater detail below.

The FARE Act additionally requires disclosure of the obligations and expectations of each party – landlord, tenant, and agents – regarding payment of co-broker fees.

Advocates and Opponents of the FARE Act

In most markets in the US, landlords pay real estate brokers to list and market their properties. In New York City, tenants, not landlords, have historically paid these fees, equal to up to 15% of the first year’s rent, in addition to paying the first month’s rent, a deposit to secure their rental housing, and other moving costs. In a highly desirable area of Manhattan like Chelsea, Tribeca, or Greenwich Village, the monthly rent for a one-bedroom unfurnished apartment as of July 2025 is over $5,000.

Supporters of the FARE Act believe it is not reasonable for renters to pay the additional cost of a landlord’s broker’s commission, given that total move in costs can be more than double the monthly rent. REBNY, the Real Estate Board of New York, representing many New York City landlords and brokers, has stated that shifting the listing broker commission cost to landlords will only increase the cost of monthly rent in one of the country’s most expensive rental markets. REBNY opposes the FARE Act and has filed a lawsuit, still pending in New York State District Court. The FARE Act has gone into effect while this lawsuit is under review.

About Dwellworks:

Dwellworks is the world’s largest provider of destination-related services and temporary living solutions for the globally mobile workforce and business travelers. We provide business-to-business solutions for Fortune 1000 and emerging companies directly and through their relocation management partners. Whether a company needs to relocate its employees across the country or around the world, we provide a range of support services to help employees, and their families transition successfully from their home location to a new destination.

Dwellworks supports the diversity of our clients’ globally mobile workforce with personalized destination solutions in 16 countries, covering hundreds of major relocation markets. Dwellworks Living, our global furnished temporary living solution, offers corporate housing accommodations for relocation and business travel customers in 125 countries. Our full-service real estate brokerage, Station Cities, supports home rentals, sales, and purchases in the Tri-State New York area and Chicago. Visit our homepage, learn about our services, and read our blogs to learn how we can help with your relocation and business travel needs.

About Station Cities:

Station Cities is a full-service real estate brokerage specializing in complex markets and has helped thousands of professionals and executives successfully buy, sell, and lease in the markets of the New York Tri-State Area and Chicago. Our team of dedicated real estate professionals is fully committed to service excellence, unyielding integrity, and delivering results through hard work and innovation. We know the ins and outs of complicated real estate markets, and we know what it takes to find a home. Learn more about Station Cities by clicking here.