NYC Broker Fees in 2026: A Landlord's Guide to the FARE Act

NYC broker fees are now the landlord's problem. Since June 2025, the FARE Act shifted broker commissions from tenants to whoever hires the broker — and in most cases, that's you. Here's exactly what the law says, what it costs, and how to make the smartest leasing decisions under the new rules.

What the FARE Act Changed About NYC Broker Fees

The Fairness in Apartment Rental Expenses (FARE) Act passed the NYC Council on November 13, 2024, with 42 out of 51 votes. Mayor Adams didn't sign or veto it, and the law took effect automatically on June 11, 2025, as Local Law 119 of 2024.

The core rule is simple: whoever hires the broker, pays the broker.

Before this law, NYC tenants routinely paid broker fees of 12-15% of annual rent — even when the landlord hired the broker. About half of all NYC rental listings carried a tenant-paid broker fee. That practice is now illegal.

The FARE Act applies to every residential rental in New York City — market-rate and rent-stabilized alike. There are no exemptions based on building size, unit type, or neighborhood. Whether you own a Chelsea brownstone or a portfolio across the Upper East Side and Harlem, the same rules apply.

Is the FARE Act Here to Stay?

Yes, with high confidence. The Real Estate Board of New York (REBNY) sued to block it on First Amendment and state preemption grounds. U.S. District Judge Ronnie Abrams dismissed the case in June 2025, ruling the challenge was based on policy disagreements rather than constitutional questions. REBNY appealed to the Second Circuit, which heard oral arguments in November 2025 but has not yet ruled.

The law remains fully in effect during the appeal, and DCWP is actively enforcing it — over 1,400 complaints filed, approximately 50 summonses issued, and roughly $7,000 in restitution paid to tenants who were illegally charged fees.

Plan around this law as permanent. Even if the Second Circuit sides with REBNY (unlikely given the district court's reasoning), any legislative shift would take years. Structuring your leasing strategy around the FARE Act is the only practical move.

When You Pay Broker Fees — and When You Don't

Not every rental transaction triggers a landlord-paid broker fee. Here's when you're on the hook and when you're not:

You pay the broker fee when:

• You hire a broker or brokerage to find tenants
• You sign a listing agreement with a broker
• Your property manager engages a broker on your behalf
• A broker publishes listings with your permission (even without a formal agreement)

You don't pay when:

• A tenant independently hires their own broker to search for apartments (the tenant pays their broker — currently around 12–15% of annual rent)
• You list the property yourself without any broker involvement
• You handle the entire leasing process directly — listing, showings, screening, lease

What NYC Broker Fees Actually Cost You Now

Let's put real numbers on it. Here's what landlords are paying with current Manhattan rents (as of early 2026):

The range matters. Before the FARE Act, the standard was 12-15% of annual rent. Now that landlords are paying, commissions are compressing. Many brokers are accepting one month's rent or negotiating lower percentages, especially for landlords with multiple units.

For a landlord with a 10-unit building averaging $4,500/month in rent, annual turnover of 30% (3 units) at one month's rent per unit means $13,500/year in broker fees — or $40,500+ at 15%.

That's a real line item. But it's not the full picture.

The Cost You're Actually Trying to Avoid: Vacancy

A vacant Manhattan apartment costs you 100% of the rent for every empty day. The average Manhattan unit took 43 days to find a tenant in September 2025, and even longer in winter months — 51 days in February 2025.

Do the math on a $4,886/month one-bedroom:

A broker fee that leases your unit 30 days faster pays for itself. The real question isn't whether to pay a broker — it's whether you can afford the vacancy of not paying one.

DIY vs. Hiring a Broker: The Honest Breakdown

This is the decision every NYC landlord is now making. Here's what each path actually looks like.

Option 1: List It Yourself

Platforms available:

• StreetEasy — NYC's dominant rental search platform. For-Rent-By-Owner listings cost $249 for two weeks (basic) or $299 (featured). Not free.
• Apartments.com — Free basic listings with premium options for increased visibility.
• Zumper — Free listings distributed to partner sites. Optional paid advertising.
• CitySnap — Free basic listings, paid premium placements.

What you'll need to handle yourself:

1. Pricing — Research comparable units, adjust for seasonality, avoid overpricing (which extends vacancy)
2. Photography — Professional photos increase inquiry rates significantly. Smartphone photos look like smartphone photos.
3. Listing copy — Write descriptions that stand out among thousands of competing listings
4. Showings — Coordinate with prospective tenants, often requiring evening and weekend availability
5. Screening — Run credit checks, criminal background checks, employment verification, income verification (NYC standard: 40x monthly rent), landlord references, and fraud detection
6. Legal compliance — NYC's Fair Chance Housing Act (effective January 2025) restricts when and how you can use criminal background checks. Violations carry penalties up to $250,000.
7. Lease execution — Drafting, negotiation, collecting deposits, move-in coordination

Where self-listing makes sense:

• You own 1-2 units and have flexibility in your schedule
• The unit is in a high-demand area with predictable turnover
• You've done this before and have a process

Where it doesn't:

• You manage 5+ units with staggered lease expirations
• You're not based in NYC (can't easily coordinate showings)
• You don't have experience with NYC housing law and screening compliance

Option 2: Hire a Broker

A good broker handles the entire leasing process — pricing analysis, professional marketing, multi-platform syndication, showings, tenant screening, lease negotiation, and move-in coordination.

What you get:

• Speed — Professional brokerages lease units 30-50% faster than self-managed listings. At Meraki Realty, our average lease-up is 11 days versus the Manhattan average of 43.
• Tenant quality — Professional screening catches what DIY screening misses. An 85% screening pass rate means we reject more applicants than we approve — and our tenant retention rate is 92%.
• Legal protection — NYC tenant screening laws changed significantly in 2025 with the Fair Chance Housing Act. A single screening mistake can cost up to $250,000 in penalties. Brokerages that screen hundreds of applicants per year stay current on compliance.
• Higher rent — Professional pricing analysis and marketing often captures 5-12% higher rents than self-listed units.

What you pay:

• Range: one month's rent to 15% of annual rent
• Portfolio discounts are standard for landlords with multiple units
• Some brokerages offer performance-based or flat-fee structures

The Bottom Line on DIY vs. Broker

The math usually favors hiring a broker once you account for vacancy cost, your time, rent optimization, and screening quality. A unit that leases 20 days faster at $150/month higher rent more than covers a one-month broker fee.

But every landlord's situation is different. A rent-stabilized studio in Harlem and a market-rate 2-bedroom in Midtown East are completely different leasing problems.

Can You Raise Rent to Offset NYC Broker Fees?

This is the first question most landlords ask. The answer depends on your unit type.

Market-Rate Units

You have flexibility — and landlords are using it. Listings that previously carried tenant-paid broker fees saw the largest rent increases, with some jumping as high as 10% as landlords repriced to absorb the new cost. Listings that were already "no fee" saw more modest bumps. The average across all converted listings was about 5.3%.

The market absorbed this because those "fee" listings were effectively cheaper before — lower rent, but tenants paid a massive upfront broker fee. Once the fee moved to landlords, rents adjusted to reflect the true cost, and tenants accepted it because they were no longer writing a five-figure check on move-in day.

But there's a ceiling. A $5,000/month apartment doesn't become a $5,700/month apartment just because your costs changed. If comparable units rent for $5,100, you'll sit vacant at $5,700. The market still sets the price — and getting your pricing right is where a broker earns their fee. Professional comp analysis consistently captures 5-12% higher rents than self-listed units while keeping vacancy low.

The smarter approach: price strategically based on your listing's history, lease fast, and work with a broker who knows how to capture maximum rent without extending vacancy.

Rent-Stabilized Units

You absorb the full cost. The Rent Guidelines Board sets annual increases — typically 2-4% — and you cannot exceed those percentages regardless of your broker expenses. For landlords with rent-stabilized portfolios, the FARE Act is a direct hit to margins with no offset mechanism.

This makes tenant retention critical. Every renewal you secure is a broker fee you don't pay. Prioritize responsive maintenance, prompt communication, and fair treatment. A 96% retention rate means you're only paying broker fees on 4% of your portfolio annually.

How to Get Maximum Value From Your Broker

If you're paying a broker fee, make sure you're getting a broker fee's worth of value. Here's what to demand.

1. Professional Marketing That Actually Works

Your listing competes with thousands of other Manhattan apartments. Baseline expectations:

• Professional photography — Not smartphone photos. Wide-angle, properly lit, staged if the unit is vacant.
• Multi-platform syndication — StreetEasy, Zillow, Apartments.com, RentHop, and 15+ additional platforms. If your broker is only listing on one or two sites, they're leaving exposure on the table.
• Accurate pricing — Based on comparable analysis, not guesswork. Ask to see the comps they used.
• Compelling descriptions — Specific to your unit's strengths, not copy-pasted templates.

2. Rigorous Tenant Screening

This is where a good broker earns their fee. NYC screening requirements are strict and getting stricter:

• Credit and financial checks — Income verification (40x monthly rent standard), employment confirmation, bank statements
• Background screening — Must comply with the Fair Chance Housing Act. Criminal checks are only allowed after a conditional offer, and only recent convictions (misdemeanors within 3 years, felonies within 5 years) can be considered.
• Landlord references — Previous landlord calls verify payment history, lease compliance, and unit condition
• Fraud detection — Fake pay stubs, synthetic identities, and fraudulent references are increasingly common
• Application fee compliance — NYC caps application fees at $20 (or actual cost of the check, whichever is lower). Your broker should handle this correctly.

3. Speed-to-Lease

Ask your broker: what's your average days-to-lease? If they can't answer with a specific number, that's a red flag. In Manhattan's current market (vacancy rate: 1.56% as of September 2025), a competent brokerage should lease a properly priced unit in under 14 days.

4. Look for Portfolio-Level Value

If you own multiple units, the right brokerage should be thinking about your portfolio as a whole — not just individual leases. Look for a partner that offers:

• Bundled services (leasing + property management) that reduce your total cost of ownership
• Proactive renewal management to minimize turnover across your entire portfolio
• Consistent quality across all your units, not just the ones that are easy to lease

How the Market Has Changed Since the FARE Act

Eight months of data (June 2025 to February 2026) tells a clear story:

Rents rose, but the story varies by listing type. The median Manhattan rent hit $4,000 in June 2025 — a 2.6% month-over-month increase and 5.2% year-over-year jump. But those numbers mask what's actually happening. Listings that previously carried tenant-paid broker fees saw much larger rent increases — sometimes as high as 10% — as landlords adjusted pricing to absorb the new cost. Meanwhile, listings that were already "no fee" saw more modest increases. If your units were already landlord-paid, you barely felt the shift. If they weren't, the repricing was real.

Inventory tightened. Over 1,000 listings vanished from StreetEasy on day one of the FARE Act. Manhattan saw a 35% drop in new listings — the lowest number in over a decade — with inventory down 7-13% year-over-year in the months following. The listings that disappeared were overwhelmingly broker-represented (93.9% of the decline) — brokers and landlords who hadn't worked out new compensation agreements simply pulled listings temporarily.

The broker-landlord relationship is evolving. With landlords now paying directly, the dynamic has shifted from transactional to strategic. Landlords are thinking more carefully about which brokerage they work with and what they're getting for the fee — speed-to-lease, tenant quality, marketing reach, screening rigor. The brokerages that deliver measurable results are earning long-term relationships. The ones that don't are losing business.

Renewals are up. Landlords are investing more in tenant retention to avoid broker fees entirely. This is arguably the healthiest market response — better landlord-tenant relationships, fewer turnovers, and more stable buildings.

Frequently Asked Questions

What This Means for Your Leasing Strategy

The FARE Act doesn't change whether you need good tenants in your units. It changes who writes the check to get them there.

The landlords coming out ahead are the ones who:

1. Treat leasing as a strategic investment — not a cost to minimize, but a process to optimize for speed, tenant quality, and long-term retention
2. Know their numbers — vacancy costs, broker fees, rent optimization potential, and the breakeven on DIY vs. professional leasing
3. Invest in retention — every renewal is a broker fee saved, and a known tenant is lower risk than a new one
4. Work with brokers who earn their fee — through faster lease-up, higher rents, better screening, and full legal compliance

The NYC rental market has absorbed the FARE Act. Rents adjusted — significantly for formerly fee-bearing listings, modestly for the rest — and inventory stabilized after an initial dip. Landlords adapted. The question now isn't whether to comply — it's how to structure your leasing operation for the best return.

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This guide reflects the FARE Act as of February 2026. The law is currently being reviewed by the Second Circuit Court of Appeals, though it remains fully in effect. For advice specific to your properties, contact our team or consult a qualified NYC real estate attorney.