Who pays broker fees when renting an apartment? Does the tenant pay? Does the landlord pay? How much should be paid? As of Feb 2020, here are the rules in New York State and how to avoid getting taken advantage of when renting.
If the realtor is working for the landlord as the landlord agent, then the landlord pays the broker fee. If the realtor is working for the tenant, as a tenant’s agent, then the tenant pays them a broker fee. As the law stands today, a realtor can collect a fee from both parties, as long as they disclose this to their client. Their client is the person that actually signed an agreement with the realtor.
The New York State Department of State (DOS) issued a Guidance on January 31, 2020, titled "Guidance for Real Estate Professionals Concerning Statewide and the Housing Stability and Tenant Protection Act" ("DOS Guidance") as it related to the payment of "broker fees " by tenants. The guidance advised realtors that payment of broker fees from that point on were no longer permissible.
A New York judge in Albany granted a Temporary Restraining Order ("TRO") on 02/10/2020, halting specifically the DOS's guidance with respect to the barring of the payment of Tenant-paid rental commissions ("broker fees"). The Article 78 Proceeding requesting a TRO against the DOS, has been granted. To our knowledge, no other part of the DOS Guidance was halted or modified by the TRO.
However, the laws may change in the future. If you are a tenant looking for a rental, ask your realtor, “Who do you represent?” If they represent you, they may charge you a broker fee and should disclose the amount up front. If they represent the landlord, they may, or may not be charging you a fee. Ask them. Either way, your best bet is to ask a lot of questions. If you need more help…AskHollingsworth.