The Fairness in Apartment Rental Expenses (FARE) Act was passed by the New York City Council in November 2024. It became law as a result of Mayor Adams taking no action within 30 days of its passage. Beginning June 14, 2025, the law makes owners responsible for covering broker fees when they hire brokers, rather than tenants. This change is aimed at reducing the financial burden for renters while promoting greater fairness and transparency in rental transactions.

Owners, however, will face new financial obligations and administrative complexities under the new law. In advance of its effective date, the Department of Consumer and Worker Protection plans to conduct outreach campaigns to help owners and tenants navigate the changes. To help you take steps to prepare for the new law, we’ll go over what the Fare Act changes and penalties for violating the law.

What the FARE Act Changes

The FARE Act requires owners who hire brokers to pay the associated fees, which tenants had previously been responsible for. Additionally, owners must now provide tenants with a clear breakdown of any fees the tenant may be responsible for before a lease is signed.

This disclosure, which must be itemized and detailed, is intended to make the rental process more transparent. The disclosure must be signed by the tenant prior to execution of the rental agreement, and owners are required to keep these records for at least three years to comply with the law.

A copy of this disclosure must also be provided to the tenant for their records. It’s important to note that the disclosure of fees isn’t limited to brokerage fees, and owners must now disclose all fees imposed on tenants as part of the execution of the lease.

The law also prohibits owners from requiring tenants to work with specific brokers, such as those representing both sides of a deal, a practice known as dual agency. This requirement is in place to prevent workarounds and give tenants more freedom in selecting representation.

Penalties for Noncompliance

Owners or brokers who don’t comply with the FARE Act face financial penalties. Initial violations carry fines of up to $1,000, while repeat offenses within a two-year window can result in fines of $2,000. Failing to meet the disclosure requirements is treated as a separate violation, with $500 for the first violation and not more than $1,000 for each subsequent violation occurring within a two-year period. Additionally, tenants have the legal right to sue owners in a civil action if they are improperly charged fees that violate the act.