The FARE Act 2024: What NYC Landlords Need to Know

The FARE Act 2024: What NYC Landlords Need to Know

By Barry Janay for The Law Office of Barry E. Janay, P.C.

The Fairness in Apartment Rental Expenses (FARE) Act, passed by the New York City Council on November 13, 2024, is set to reshape the rental landscape in one of the world’s most competitive housing markets.

This significant piece of legislation, taking effect in summer 2025, will have important implications for landlords and property managers in New York City.

Key Provisions of the FARE Act

Broker Fee Responsibility

The most notable change is that landlords, not tenants, will be responsible for paying broker fees when they engage a real estate agent to advertise or market a rental unit.

This shift aims to reduce upfront costs for tenants and make rental housing more accessible.

Fee Disclosure

Landlords and agents will be required to disclose all fees a tenant will be asked to pay, including both upfront and recurring fees, in their listings and rental agreements.

An itemized written disclosure of these fees must be provided before a lease agreement is signed.

Penalties for Non-Compliance

Violations of the FARE Act can result in civil penalties of up to $1,000 for the first violation and $2,000 for subsequent violations within a two-year period.

Impact on Landlords

Financial Considerations

The most immediate impact for landlords will be the additional expense of covering broker fees. This could potentially lead to increased monthly rents for non-regulated units to offset these costs.

Operational Changes

Landlords should start preparing now for how they will adapt their operations to comply with the new law. This may include reviewing and updating lease agreements, marketing strategies, and budgeting processes.

Market Dynamics

The FARE Act may encourage alternative brokerage models, such as flat-fee services, promoting a more competitive market. Smaller landlords may face more significant challenges in absorbing these new costs compared to larger corporate landlords.

Potential Benefits

Despite the additional costs, the FARE Act may offer some advantages for landlords:

1. Increased Tenant Pool: By reducing upfront costs for renters, landlords may attract a larger pool of potential tenants.
2. Streamlined Process: The new fee disclosure requirements may lead to a more transparent and efficient rental process, potentially reducing confusion and disputes.
3. Market Competitiveness: Landlords who adapt quickly to these changes may gain a competitive edge in the market.

Timeline and Implementation

The FARE Act is set to become law on June 14, 2025, approximately 180 days after it officially became law on December 14, 2024.

This gives landlords about six months to prepare for the changes.

Conclusion

While the FARE Act presents challenges for NYC landlords, it also offers opportunities to adapt and potentially improve the rental market. By understanding the new requirements and planning ahead, landlords can position themselves to navigate these changes successfully. As the implementation date approaches, it will be crucial for landlords to stay informed about any additional guidance or regulations that may be issued to clarify the law’s application.

For personalized legal advice on how the FARE Act may affect your property management practices, The Law Office of Barry E. Janay, P.C. offers free video consultations. Contact us today to schedule your consultation and ensure you’re prepared for these significant changes in New York City’s rental landscape.

Barry E. Janay

Associate Attorney

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