If you've spent more than five minutes apartment hunting in New York City, you already know the drill. You find a place you love. It's in your budget. You're excited. Then you scroll down and see it: broker fee, 15% of annual rent. On a $3,000-a-month apartment, that's $5,400. Due upfront. On top of first month's rent and a security deposit.
Yeah. It's a lot.
The good news? That specific pain point is now illegal in New York City. The FARE Act went into effect on June 11, 2025, and it fundamentally changed who foots the bill for broker fees. The not-so-good news is that a lot of renters don't fully understand what the law covers, and some landlords are already trying creative workarounds.
So let's actually break it down. What changed, what didn't, and what this means for your next apartment search.
Okay, So What Is the FARE Act?
FARE stands for Fairness in Apartment Rental Expenses. It's a city law — officially Local Law 119 of 2024 — passed by the NYC Council in November 2024 with a strong majority of 42 out of 51 votes. Mayor Adams didn't sign it, but he didn't veto it either, so it automatically became law. It took effect six months later, on June 11, 2025.
The core rule is simple: whoever hires the broker pays the broker.
In most NYC rentals, the landlord hires a broker to list and market their apartment. Under the FARE Act, that means the landlord pays the broker's fee — not you. You're the renter. You didn't hire anyone. You shouldn't be writing a check for someone else's agent.
More about the nyc.gov/site/dca/about/FAQ-Broker-Fees.page
How Much Money Are We Actually Talking About?
A lot. In 2023, the average New Yorker moving into a new rental paid close to $13,000 in upfront costs, including broker fees, first month's rent, and a security deposit. Broker fees alone typically ran between 10% and 15% of the annual rent.
Quick example so this feels real:
- Monthly rent: $3,200
- 15% broker fee on annual rent ($38,400): $5,760
- Security deposit (one month): $3,200
- First month's rent: $3,200
That's $12,160 to move in. Before you've bought a single piece of furniture.
The FARE Act takes that broker fee chunk off your plate entirely — in situations where you didn't hire the broker yourself. That's a real, tangible difference for a lot of people.
There Are Some Workarounds Being Tried. Here's What to Watch For.
Look, not everyone is playing fair. Since the FARE Act took effect, NYC's Department of Consumer and Worker Protection (DCWP) received over 1,125 complaints in the first several months alone. People are still being charged fees they don't legally owe.
The most common tactics to watch for:
- Claiming the broker is working for you, not the landlord. This doesn't hold up. If the broker listed the apartment on the landlord's behalf — including on sites like StreetEasy or Zillow — they're the landlord's agent. Period.
- Folding the broker fee into higher monthly rent. This one is legal, technically. Landlords can raise rents to offset costs. It's worth comparing similar listings to see if a place is priced unusually high.
- Conditioning the rental on you hiring a broker. Completely illegal. No one can make hiring a broker a requirement for signing a lease.
If something feels off, you have options. File a complaint through the DCWP portal or call 311. The law also gives you the right to sue privately to recover any fees you were illegally charged.
What the FARE Act Doesn't Change
This is the part of the conversation that doesn't get enough airtime.
Broker fees were one barrier to getting into a NYC apartment. But they were never the only one.
Landlords in New York City still require renters to earn 40 to 45 times the monthly rent annually to qualify on their own. On that same $3,200 apartment, you'd need to show roughly $128,000 to $144,000 in annual income. If you're a recent grad, a freelancer, an international renter without a US credit history, or someone who's just had a rough patch financially, that number can be a hard wall.
The FARE Act doesn't change any of that. You still need:
- Sufficient income or verifiable assets
- A qualifying credit score
- Solid rental history, or a co-signer who checks out
- A security deposit (still capped at one month's rent under NY state law, but that's still a chunk of cash)
- Likely, you’ll need a guarantor (like PandaGuarantee or TheGuarantors)
For a lot of renters, especially those moving to NYC for the first time, the qualification piece is where things break down — not the broker fee. You're not alone in that. It's genuinely one of the harder parts of renting here.
So What Do You Do If You Can't Qualify on Your Own?
Traditionally, the answer was: find a co-signer. But that assumes you have someone in your life with strong US credit and enough income to take on that responsibility. A lot of people don't. International renters definitely don't. And even if you do have someone willing to co-sign, asking them to legally back your lease for a year is a big ask.
One option that's become more common — especially in NYC — is a lease guaranty bond. Instead of needing a personal co-signer, the renter works with a guaranty company that backs the lease on their behalf. The landlord gets protection against unpaid rent, damages, and other covered losses. The renter gets approved for an apartment they otherwise couldn't qualify for on their own.
It's not free, but it's often significantly less than the combination of a months-long co-signer headache and a rejected application. And for renters without a US credit history or a local support network, it's sometimes the clearest path forward.
PandaGuarantee is one option worth looking into if you're in that situation. It costs nothing to landlords, and tenants can often get a decision quickly. If you're curious how it works, their team is pretty accessible, not a giant call center, more of a startup you can actually talk to. And PandaGuarantee is backed by A+ rated insurance carrier, so most landlords will accept their surety bond.
The Bottom Line
The FARE Act is a genuine win. It removes a fee that was, frankly, always a bit absurd — and it puts thousands of dollars back in renters' pockets. If you're apartment hunting in NYC right now, you should absolutely know your rights under this law and push back if someone tries to charge you an illegal broker fee.
But don't go in thinking the FARE Act solves everything. The NYC rental market is still competitive, the income and credit requirements are still intense, and the best apartments still go fast. Knowing the full picture — what's changed and what hasn't — gives you a real edge.
One question to think about before your next apartment search: do you know exactly how you're going to handle the qualification step if your income or credit doesn't hit the landlord's threshold? Worth figuring out before you fall in love with a listing.
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