The Fairness in Apartment Rental Expenses (FARE) Act officially took effect June 11. This legislation changes the rules for broker fees in New York City. After months of legal maneuvering, a federal judge rejected the real estate industry’s attempt to block the law on constitutional grounds. With this ruling, brokers hired by landlords can no longer charge fees to tenants.

What You Need to Know: As of June 11, landlords and not tenants must pay broker fees if they hire the broker to list or market an apartment. Tenants will still pay a broker’s fee only if they themselves hire that broker to find them an apartment. Under the FARE Act, all tenant fees must be clearly disclosed in rental listings and lease agreements, and repeat violations could result in fines of up to $2,000.

This comes after the Real Estate Board of New York (REBNY) filed a lawsuit to halt the law’s rollout after the law’s passage in late 2024, arguing it infringed on free speech, interfered with private contracts, and conflicted with state law. Federal Judge Ronnie Abrams rejected those arguments, finding that the law was a legitimate effort to improve housing access and didn’t violate constitutional protections. While one claim under the Contract Clause remains technically alive, it faces a steep uphill climb and the judge denied REBNY’s request to delay the law.

The Bottom Line: The FARE Act is now enforceable, with the NYC Department of Consumer and Worker Protection authorized to investigate complaints and issue penalties. Landlords who use brokers to lease units must factor in this new cost and adjust their marketing and leasing strategies accordingly.