Briefs

Real estate lobby group sues to block law that shields tenants from brokers fees

December 17, 2024 Brooklyn Eagle Staff

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CITYWIDE — A new law protecting tenants from huge broker fees is the focus of a lawsuit from the city’s real estate lobbyists, who seek to void it before it takes effect, reports Gothamist. The Real Estate Board of New York (REBNY) and its allied group of brokerages and landlords, have filed a lawsuit in Manhattan federal court to stop the measure, which the veto-proof City Council passed. The law, which according to the City Council’s legislation website is Int. 0360-2024, Version: A, and which was enacted last Friday, Dec. 13, will “prohibit brokers from passing their fee onto tenants where the broker is exclusively representing the landlord’s interests. This would include brokers who publish listings with the landlord’s permission. Landlords or their agents would be required to disclose the fees that the tenant must pay in their listings and rental agreements. The Department of Consumer and Worker Protection would enforce this bill and would conduct education and outreach. Any person who violates this bill would be subject to a civil penalty or civil action.”

REBNY’s general counsel Carl Hum said the legislation “infringes upon constitutional guarantees of free speech and contract rights” by prohibiting brokers from posting apartments on online listings platforms without being explicitly contracted by a landlord to do so. But advocates for the law, whose main sponsor was Councilmember Chi A. Ossé (D-36), have pointed out that tenants were not party to the contract between landlords and brokers, therefore they should not be forced to incur the broker fees. The additional cost, combined with a security deposit and first month’s rent, could render the lease financially unfeasible for prospective tenants.

The bill automatically became law after Mayor Eric Adams declined to sign or veto it by Friday.

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