Massachusetts Gov. Calls for Ban on Tenant-Paid Broker Fees

Taking a cue from New York City, top officials in Massachusetts and Boston are forging ahead with a fight to eliminate tenant-paid broker fees at the state and city levels.

Gov. Maura Healey is the latest official to come out against the way broker fees are dealt with in the state, the Boston Herald reported. The governor appeared on GBH’s Boston Public Radio on Tuesday, where she argued broker’s fees should be “abolished.”

“I think they should go away,” Healey said, citing housing affordability in the state. “I totally support that, and I support taking action to make that happen.”

As for what would happen to broker’s fees should tenants no longer be required to pay them, Healey tasked landlords with making their own arrangements.

This is not a new push in Massachusetts. Last year, the state senate included a policy in its housing bill that would’ve shifted the burden of broker fees from tenants to landlords. The House didn’t agree to the measure, though, effectively killing it.

A similar measure will likely be introduced again this year. Senate President Karen Spilka specifically addressed the broker fee issue during her inaugural address last week.

Similar efforts to revise policy on broker’s fees are unfolding at the local level in Massachusetts, including in Boston, Somerville and Cambridge. Boston City Council will reintroduce a petition that would shift the fee towards the person or party that hired the broker, though the Massachusetts Legislature would need to sign off on the home rule petition.

The Greater Boston Real Estate Board supports changes to the administration of broker’s fees, but other figures in the industry, including Boston Pads CEO Demetrios Salpoglou, expressed concerns that agents could be put out of business or costs could be passed on to tenants through higher rents.

The conversation in Boston and Massachusetts may have been reignited after the New York City Council approved a measure in November that freed tenants from paying commissions to agents they did not hire.

— Holden Walter-Warner