Impact of Broker Fees on Landlords: 2025 Guide for Maximizing Rent Post-FARE Act
How New York's FARE Act reshapes broker fee arrangements for landlords and why paying broker fees upfront may actually maximize your rental income.
Daniel McDevittJune 29, 20251 min read
This guide examines how New York's FARE Act (effective June 11, 2025) reshapes broker fee arrangements for landlords. Previously, landlords could shift fees to tenants; now they must compensate the agents they hire to represent them directly.
Main Argument
The article presents a case study comparing two nearly identical Williamsburg condos. Unit A (landlord-paid fee at $5,500 rent) achieved $59,216.67 net revenue after vacancy losses, while Unit B (tenant-paid fee at $5,000 rent) earned $56,833.34—a difference of approximately $2,400.
Critical Findings
Year One Comparison:
- Faster lease-up protects against vacancy costs
- Despite paying the broker fee upfront, the higher-rent unit outperformed financially
- Reduced time-on-market (7 days vs. 19 days) minimized revenue loss
Multi-Year Impact
By year three with 3% annual increases, the earnings gap widened to $13,045.40, demonstrating how initial rent differential compounds over time.
Additional Considerations
- Landlords may offset condo/co-op application fees by passing costs to tenants (with required disclosure)
- Higher advertised rents increase qualification requirements for applicants
- Additional gross rent collected potentially increases property appraisal values