Can i get broker fee back

New York State Senators Jabari Brisport and Julia Salazar introduced a bill last month that would ban landlords from forcing tenants to pay their broker fees.

The bill was introduced about six weeks before the Legislative Session ends and there is not a matching bill in the Assembly, which is a requirement for the proposal to become law. The Department of State attempted to bar the practice last year by issuing guidance directing real estate professionals and landlords to stop collecting broker fees from tenants. Broker fees in the city are typically about 15 percent of the annual rent, which when combined with the first month of rent and a security deposit can mean tenants must come up with a five-figure sum just to move in.

The core question of the case was whether or not lawmakers — and the Housing Stability and Tenant Protection Act of — intended to ban the tenant-pays practice. Though DOS could have appealed the decision, lawmakers are taking up the cause in part, they say, to avoid further costly litigation for the state.

The offices of Sen. Brisport and Sen. Salazar did not immediately respond to requests for comment. Since the pandemic began, there have been record levels of rental vacancies in the city, which forced landlords to lower rents and offer substantial concessions, including landlords paying broker fees, to woo tenants. The Real Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry. By clicking Subscribe you agree to our Privacy Policy.

Javascript is disabled in your web browser. May 17, PM. By Erin Hudson. Contact Erin Hudson. Landlords were still using brokers, and tenants were still paying broker commissions. Moreover, in late , the New York State Department of State issued a statement of guidance which clarified application of the new law.

In this statement, dated January 31, , the Department of State clarified its position on broker fees, and stated that:. Circling back to the original question: if I paid a broker fee, am I entitled to get the broker fee back?

It has further been reported that a spokesperson for the Department of State issued a statement that the guidance is not intended to apply retroactively although I cannot locate the source of that statement. The real tricky part is for those renters that paid a broker fee between June 14, and January 31, The law was in effect at the time, but the Department of State had not issued any guidance.

Further, the statement of guidance that the DOS issued in September was silent on the issue of broker fees paid by tenants. If the specific apartment sought is subject to a listing agreement between the landlord and a broker, the broker with whom you will be dealing likely represents the interests of the landlord.

The tenant is free, however, to negotiate with the broker as to when and how the commission is earned and should insist on a written commission agreement with the broker. It effectively banned brokers working with a landlord from collecting that 12 to 15 percent fee. For the time being, yes womp womp. A tenant would also have to pay the fee if they, rather than the landlord, hired a broker to help them find an apartment. But this leaves a lot of gray area, especially since non-exclusive listings are common in the rental market.

After DOS first published its guidance, some prospective renters told Curbed that brokers urged them to sign disclosure forms saying they represent them—a move that would allow those brokers to then collect fees under the new guidance.

But this is already a common practice, according to Andrea Shapiro from the Met Council on Housing: When advertising a no-fee apartment, landlords may have already baked that fee into the monthly rent.

And this is all theoretical while the restraining order is in place. So far only one challenge has been formally filed against the state. That decision is expected to stay in place until at least September 11, when Mackey has asked DOS to respond in court. So the big question remains: To rent or not to rent? Cookie banner We use cookies and other tracking technologies to improve your browsing experience on our site, show personalized content and targeted ads, analyze site traffic, and understand where our audiences come from.