End of Costly Broker Fees? Council Pushes Landmark Bill Finally. Credit | The City
United States: There are many things that residents have to pay for in the ever-costly New York City, but the dreaded broker fee must be one of the most disgraced fees.
After renting housing, one is liable to pay amounts equivalent to the monthly rent or more than USD 10,000 to cover costs such as a security deposit, the first month’s rent, and a fee to the broker.
The fee is most often greater than one month’s rent, and at the moment, that amount is roughly USD 3,400 for rent alone.
The New York City Council is likely to pass a bill on Wednesday that would require the shift of the cost of broker fees to landlords in most cases.
More about the news
The bill’s sponsor, Chi Ossé, a progressive city councilman from Brooklyn, said Trump’s victory underlined the growing need for Democrats to address the public’s affordability crunch in terms of the cost of living.
According to Mr. Ossé, “A cruel and unfair system that has persisted for decades will end,” and “Democrats will prove we can tackle affordability. And the voters will see that government can work for them.”
About the broker fee system
The nature of the New York broker fee system is quite unconventional.
In most other cities, the landlord pays brokers’ fees for rentals. The real estate industry has vigorously and actively fought against the bill.
The leading lobbying group for the industry, the Real Estate Board of New York, has stated that when landlords are required to pay the fees – they would recover that through other means, for example, by increasing the rent charged, the News York Times reported.
It currently has 32 backers in the 51 members of the City Council, two short of the number required to override the Mayor should he veto the bill, which might be likely if the incumbent, Mayor Eric Adams, takes that action.
Democrat and ally of real estate movers, Mr. Adams, expressed reservations about the bill during his weekly news conference on Tuesday, and he added that he did not wish the bill to be unfriendly to the owners of small properties.
According to him, “The bill has the right intention, but sometimes good intentions do not get the results you’re looking for,” while warning that the bill could lead to “permanent” rent increases.
The bill also requires the hiring of a broker to pay the fees. Moreover, landlords and their agents would need to open up about listings and rental agreements.
Moreover, the violations could also lead to a civil penalty of up to USD 2000. This bill would be applied one hundred and eighty days after it becomes law.
