Ending Tenant-Paid Broker Fees: A Move Toward More Affordable Renting

Renters across the country are seeing a change: landlord-paid broker fees are becoming the new norm. In many places like New York City and Massachusetts, laws now require the person who hires a rental agent—usually the landlord—to pay their broker fees instead of tenants.

Renters across the country are seeing a shift in how upfront rental costs are handled, with landlord-paid broker fees becoming more common due to recent policy changes.

In places like New York City and Massachusetts, new laws now require that the person who hires a rental broker—typically the landlord—also pays for their services. This marks a significant change from long-standing practices where tenants, even when they didn’t choose the broker, were often expected to cover fees equal to one month’s rent or more. Supporters say this change makes renting more affordable and fair, especially for low-income tenants who face large upfront costs. However, some property owners and real estate professionals warn that the new rules could lead to higher monthly rent as landlords look to recover their costs. As this trend spreads to other states, the debate continues over how best to balance affordability, transparency, and the realities of the housing market.

In New York City, the FARE Act took effect recently. It forbids tenants from paying fees to brokers hired by landlords that often totaled 10–15% of annual rent. That meant many renters had to pay the equivalent of a month’s rent upfront. The law affects all rental units and is expected to cut moving costs by around 42%.

The law stops tenants from having to pay broker fees when they didn’t choose to hire the broker—something that used to cost renters thousands of dollars, often equal to one full month’s rent or more. These fees could be a major hurdle, especially for renters with limited savings or those trying to secure housing quickly. Supporters of the law believe it will reduce upfront costs by over 40%, giving more people a fair shot at finding a place to live. At the same time, some in the rental business worry that landlords might find ways to work around the rule or raise rent quietly to cover their own expenses. While the change is being praised by tenant advocates, others see it as part of a growing shift in housing policy that could bring unexpected challenges to both sides of the rental market.

In Massachusetts, a similar change became law on August 1. Renters no longer must pay broker's fees unless they choose to hire their own broker. The fees must now be covered by the party who hired the agent. This change aims to reduce moving costs that sometimes exceeded $10,000 when combined with other upfront payments GBH.

In Massachusetts, a new law that took effect on August 1 is changing the way rental fees work, especially for people who are already stretched financially. Now, renters are only responsible for broker fees if they choose to hire a broker themselves. If a landlord brings in a broker, it’s the landlord who must cover the cost. This rule is meant to make moving more affordable, especially in places where upfront costs—including first and last month’s rent, security deposits, and broker fees—sometimes added up to over $10,000. While many see the law as a step toward fairness, some critics argue it could lead to fewer available listings or encourage landlords to pass the cost on through rent hikes. A few smaller property owners have even said they may stop using brokers altogether, which could shift how renters find apartments and who gets to see listings first. These reactions show how a law aimed at helping renters can have ripple effects that reach into less visible corners of the rental market.

Not everyone is confident these laws will help renters in the long term. Some landlords and industry groups argue that landlords may raise rents to offset the fee they now pay. Indeed, reports show rent hikes of 11–15% in New York shortly after the law took effect. Listings dropped and a shadow market emerged in some areas, raising concerns about access to rentals.

Some people are unsure if these new laws will truly help renters over time. While the goal is to lower move-in costs, some landlords and real estate groups believe the opposite might happen. They say landlords, now responsible for paying broker fees, could raise the monthly rent to make up the difference. In New York, rent increases between 11% and 15% were reported shortly after the broker fee ban went into effect. At the same time, fewer listings showed up on popular rental sites, and some landlords started sharing apartment offers through private networks instead of public platforms. This made it harder for regular renters to find available units, especially those without personal connections or time to search off the grid. These patterns have raised concerns that while one barrier has been removed, others may quietly take its place, especially in fast-moving or competitive rental markets.

States like Virginia are also taking action. Virginia has passed bills requiring clear fee disclosures in leases and banning extra fees for payment processing. These laws take effect in mid-2025 and aim to limit surprise charges and improve transparency in rental agreements.

Other states are beginning to follow with their own efforts to change how rental fees are handled. In Virginia, new laws set to begin in mid-2025 will require landlords to clearly list all fees in the lease, including smaller ones that are often hidden or added later. These laws also ban extra charges just for using certain payment methods, like paying rent online or with a credit card. While these changes are meant to prevent surprise costs and make lease agreements more straightforward, some smaller landlords and property managers have expressed concerns. They worry that stricter rules may lead to higher business costs, or limit how flexible they can be with payment systems. In response, a few have said they may simplify their services or avoid newer tools that charge processing fees altogether. These reactions show how even small rule changes can affect day-to-day decisions in parts of the housing market that often go unnoticed.

How It Works

Under these laws, tenants cannot be required to pay broker fees unless they hired the agent themselves.
Only charges such as first month’s rent, last month’s rent, a security deposit, and actual lock replacement costs are permitted in advance.
Both brokers and landlords must now clearly state all applicable fees on the first page of the lease.

What to Know

These laws apply only to leases signed after the effective date. If a lease was already signed before then, the old rules still apply BostonGlobe.com.
Penalties may apply for violations. In New York City, landlords can face fines up to $2,000 for repeat offenses or undisclosed fees The Sun.

What happens next will depend on how the new laws play out over time and how people on all sides respond.

Supporters believe these changes will give renters some relief by cutting down on large upfront costs, making it easier to move without needing thousands of dollars saved. But others worry the savings may not last. Some say landlords could quietly raise rent or pull listings from public sites, making it harder for everyday renters to find a place. There’s also concern that in less-regulated areas, creative workarounds could pop up—like new service fees under different names or exclusive listings only shared by word of mouth. Whether these outcomes take hold or fade will likely depend on how closely the rules are enforced and whether lawmakers adjust to new problems as they come up.

As the market adjusts, renters and landlords alike will be watching to see if the new system truly levels the playing field or simply changes the shape of the same challenges.

Sources

Massachusetts AG advisory and consumer guidance Mass.govGBH
News reports on New York’s FARE Act and rent trends scmp.com+8The Wall Street Journal+8New York Post+8
Coverage on Virginia landlord-tenant fee laws trackbill.com