Hochul backs city’s broker fee ban set to take effect this June
Council Member Chi Ossé held a press conference before the City Council voted on the FARE Act. Photo credit: Gerardo Romo / NYC Council Media Unit on Flickr
Gov. Kathy Hochul on Wednesday came out in support of a law banning forced broker fees amid a legal challenge from a real estate lobbying group. In a video posted online, the governor backed Council Member Chi Ossé’s Fairness in Apartment Rental Expenses (FARE) Act, which shifts the payment of broker fees from renters to landlords. Soon after the bill became law last year, the Real Estate Board of New York (REBNY) sued the city to stop it from taking effect in June, claiming it preempts New York State law.
The Real estate lobby is suing to stop the FARE Act, but State law is on our side w/ @GovKathyHochul. pic.twitter.com/0sltzl5R7X
— Chi Ossé (@OsseChi) April 2, 2025
The governor’s public backing comes after New York State Attorney General Letitia James and the Department of State filed an amicus brief on Friday supporting the city against the lawsuit and agreeing that the FARE Act does not infringe on state law.
“I’m Governor Kathy Hochul and I know what state law says. And it does not interfere with Chi Ossé’s FARE Act,” Hochul said in a video posted on X on Wednesday. “In fact, that’s just why we filed a brief in court to support the FARE Act.”
“Now, the court should rule in favor of the city. And these broker fees, they should end forever, starting this June.”
The City Council voted to approve the FARE Act last November with a 42-8 vote. The law addresses the unique-to-New York system, which makes tenants pay one-time, up-front fees to brokers, typically ranging between one month’s rent and 15 percent of the total annual rent, even if the agent is hired by the landlord or building management company. As 6sqft previously reported, the Council said the average city renter moving to a new apartment spent $10,454 in upfront costs in 2023.
REBNY sued the city in December, claiming the FARE Act violates brokers’ rights to free commercial speech under the First Amendment and oversteps the “Contracts Clause in the Constitution by voiding contracts between brokers and landlords and preempts New York State law,” 6sqft reported. In January, the group filed a preliminary injunction to stop the law from taking effect.
“At this point, the only opinion on the FARE Act that matters is that of the federal courts,” a spokesperson for REBNY told The Real Deal. “We remain confident in the merits of our legal arguments and look forward to our day in court.”
REBNY previously won a suit against a brief ban of broker fees in 2020. Under the 2019 Housing Stability and Tenant Protection Act, landlords could not deregulate rent-stabilized apartments, and security deposits were capped at one month’s rent. As part of the guidance issued by the Department of State, brokers hired by landlords could not be paid by the prospective tenant. After lawsuits by REBNY and several brokerages, a judge struck down that part of the law in 2021.
The FARE Act is expected to take effect on June 14.
“Forced broker fees should be gone forever thanks to the FARE Act, but big real estate has one last desperate play,” Ossé said in the video, referring to the lawsuit.
He added: “They’re trying to delay the FARE Act. At least until after summer rental season when broker fees are highest to extract one last $5,000 check from every New Yorker. But the law is on our side. It’s time for the real estate lobby to give up this fight. We’re going to win.”
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