Can NYC’s Broker Fee Reform Withstand Legal Pushback?

As New York City prepares to implement the Fairness in Apartment Rental Expenses (FARE) Act, a legal challenge may halt enforcement before the law takes effect next month. The new law, passed by the City Council in November, changes who pays broker fees, shifting the cost burden on landlords who hire the brokers rather than tenants.

The Real Estate Board of New York (REBNY), joined by other industry groups, sued in December to block the law, claiming it violates constitutional protections around private contracts and commercial speech. They argue the rule could backfire, raising rents, cutting into apartment listings, and upending the brokerage business model. In a recent court hearing, the industry groups asked U.S. District Judge Ronnie Abrams to block enforcement while the case proceeds. The judge hasn’t said when she will reach a decision...