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New York

Brokers, landlords exploiting rent-law uncertainty: tenants

Even when apartment hunters know their rights, they sometimes give in

Tenants say brokers and landlords are exploiting uncertainty created by changes to the rent law, and the broker-fee upheaval (Credit: iStock)
Tenants say brokers and landlords are exploiting uncertainty created by changes to the rent law, and the broker-fee upheaval (Credit: iStock)

This should be a happy time for tenants: Sweeping rent-law changes last June capped the cost of rental application fees, and a recent state ruling scrapped some broker fees entirely.

But while the latter issue plays out in court, some tenants say uncertainty over the rules — and the pressure to snag an apartment — is being used against them.

After the state issued a guidance February stating that tenants would no longer have to pay broker fees when a broker was hired by a landlord, Raissa Carpenter and her partner toured a property and submitted an offer, which the agent accepted, according to The New York Times.

“He then suggested we hire him so that it would be legal for him to charge us a fee,” Carpenter told the newspaper.

The couple declined — aware of the state’s position on broker fees — and the broker told them that the room was no longer available. Not long afterward, they saw it relisted on StreetEasy.

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In a cutthroat rental environment, tenants are put in a difficult position when faced with what they see as a breach of the rules because there are often many other applicants right behind them.

“When you are looking for housing, you are not in a position to be citing the legislation to a broker or prospective landlord and that you demand they follow the law,” Marika Dias, director of the Tenant Rights Coalition at Legal Services NYC, told the Times.

The real estate industry has fought hard against the broker-fee decision by the Department of State, which shocked many groups, including the Real Estate Board of New York and the New York Association of Realtors.

After a judge granted a temporary restraining order in February, challengers REBNY and NYSAR told agents they would be able to “do business in the same way they did prior to last week’s DOS memo without fear of discipline by the DOS.” [NYT] — Sylvia Varnham O’Regan

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Broker FeesRent LawRentals