Renters

What the FARE Act Means for Brooklyn Renters, Brokers & Landlords

May 31, 2025

What the FARE Act Means for Brooklyn Renters, Brokers & Landlords

By Peter Mancini | Pen Realty – Licensed Brooklyn Real Estate Broker | REBNY & BNYMLS Member

The Brooklyn rental landscape is evolving—and fast.

On June 11, 2025, a game-changing piece of legislation takes effect in New York City: the Fairness in Apartment Rental Expenses Act, or FARE Act. For Brooklyn renters, landlords, and real estate brokers, this law significantly reshapes how rental commissions are paid—and who’s responsible.

Let’s break down what you need to know, how to stay compliant, and how Pen Realty is leading the way with integrity, transparency, and client care.

A Quick Overview: What Is the FARE Act?

Passed by the NYC Council in December 2024, the FARE Act was introduced to make the city’s rental market more equitable. Previously, tenants were often responsible for paying broker commissions—even when they had no role in hiring the broker.

That ends this summer.

Under the FARE Act, the party that hires the broker pays the broker. In most rental scenarios, that means:

✅ If the landlord lists a property through a broker (even an open listing), the landlord pays the fee.
✅ Tenants no longer pay broker commissions on landlord-listed units.
✅ Tenants may still hire a broker to find them an apartment, but a written agreement must be in place.

This shift applies to all new residential leases signed on or after June 11, 2025. Lease renewals or agreements signed before this date are not affected.

What Brooklyn Renters Should Know

If you’re a renter in Park Slope, Bay Ridge, or Williamsburg, the FARE Act could save you thousands.

Historically, many renters in Brooklyn had to budget for one month’s rent—or more—as a broker fee, even when the apartment was found on a public site. But going forward, if the landlord used a broker, the broker’s fee is their responsibility.

Still want help finding a dream apartment? You can still hire a broker to represent you—but make sure a written agreement is in place so expectations are clear and legal obligations are met.

➡️ Need help navigating your lease or apartment search? Connect with Peter Mancini of Pen Realty

What Landlords Must Do Now

Brooklyn landlords should act immediately to adjust their leasing procedures.

Update all listing agreements to clearly define who is paying the broker fee.
Disclose all fees to tenants in writing, itemized and signed before any lease is executed.
Ensure compliance: Violations can result in fines of up to $2,000.

Pen Realty is actively helping landlords review and revise their marketing, documentation, and showing procedures to stay compliant with this law. If you own property in Brooklyn and need guidance, our team is here to help.

➡️ Explore our Landlord Services Guide for tips on compliance, leasing, and tenant relations.

What Real Estate Brokers Need to Know

The FARE Act is a paradigm shift for New York City brokers—especially those working in Brooklyn's competitive rental market.

Brokers must now ensure:

Clear, written agreements with either the tenant or landlord before any work is done.
Proper disclosure of all compensation terms, especially in co-brokered deals.
Immediate release of listings if a landlord refuses to compensate as agreed.

At Pen Realty, we’ve implemented rigorous internal policies to maintain compliance, reduce liability, and deliver exceptional service to all parties.

Why It Matters: Transparency, Fairness, and the Future of NYC Rentals

According to The Real Deal, the FARE Act has sparked intense debate in the brokerage community, with some fearing decreased revenue and others celebrating enhanced renter protections. Meanwhile, The Wall Street Journal and The New York Times have spotlighted how the law may level the playing field for tenants who’ve historically been priced out of quality housing due to upfront broker fees.

As a REBNY and BNYMLS member, I believe that education, clarity, and fairness are essential for the health of New York’s real estate market. This new law is not without challenges—but it creates an opportunity for a more transparent and ethical way forward.

How Pen Realty Is Preparing Brooklyn for This Shift

At Pen Realty, our mission goes beyond just transactions—we advocate for informed decisions, respectful negotiations, and long-term relationships with clients.

We are:

✅ Training our team on FARE Act compliance
✅ Updating disclosures and lease agreements
✅ Educating our clients through video, social media, and community outreach

Whether you’re a landlord seeking compliance support, a tenant searching for a home, or a broker navigating this transition, Pen Realty is here to guide you.