This is surprising news, but this legislation won't completely change the landscape. Rather, large landlords will continue on much as before, small landlords may suffer a painful period of adjustment as they pay the brokers (rather than the tenants), brokers may benefit by allying themselves clearly with landlords, but may also get squeezed as more landlords bring leasing in house. Tenants are better off as their up front costs are lower. We’ve broken it down further for you below:
Earlier this week, New York State regulators clarified that a $20 cap on application fees for apartments, passed as part of sweeping rent regulation last June, applies to broker fees as well. Though brokers will still be able to charge and collect fees as part of their services, the fees will be paid by landlords instead of tenants, unless a tenant explicitly hires a broker to help them in their apartment search. Until this latest guidance was released, many had wondered to what extent the broker community would be impacted by the 2019 legislation.
What does this mean for tenants?
How are brokers affected?
What is the impact on landlords?
As a partner to the real estate industry, we aim to find the opportunities and the bright side in any legislative reform, helping our clients seize those wins. However, we do want to note that regulators should look to engage the market ahead of big decisions such as this, to avoid panic and knee jerk reactions. By providing more clarity, transparency, or notice, the industry can prepare and take a more measured response.
No matter the current regulatory environment, we will always aim to be the go-to, most trusted resource for the industry:
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