{"id":37299,"date":"2020-02-26T14:28:56","date_gmt":"2020-02-26T12:28:56","guid":{"rendered":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/?p=37299"},"modified":"2025-05-22T13:09:36","modified_gmt":"2025-05-22T10:09:36","slug":"new-york-broker-fees-legal-or-banned","status":"publish","type":"post","link":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2020\/02\/26\/new-york-broker-fees-legal-or-banned\/","title":{"rendered":"New York Broker Fees: Legal or Banned?"},"content":{"rendered":"\n

NYC-based\u00a0boutique law firm\u00a0Pardalis & Nohavicka<\/a>\u00a0brings the latest legal updates from the world of real estate to PropertyShark.\u00a0Pardalis & Nohavicka\u00a0handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions,\u00a0currently litigating and representing clients throughout the United States and around the world.<\/em><\/strong> <\/p>\n\n\n\n

February will certainly be memorable for New York State brokers. At the beginning of the month, the New York Department of State issued guidance on rent reform laws, effectively banning broker fees for renters. <\/p>\n\n\n\n

Specifically, this would mean that New York renters would\nno longer have to spend thousands of dollars up front to cover the cost of a security deposit and brokers fees (which\ncould be up to 15 % of their yearly rent). Brokers would still be able to\ncollect a fee for representation, just not at the expense of the renter. Instead, landlords would now be liable for paying the hefty broker fee.<\/p>\n\n\n\n

The ban rocked\nthe New York real estate\nindustry. Brokers claimed\nthat the new rule\nwould provide limited relief, if any, to tenants because landlords could increase\nrent to cover the cost of the broker\nfees; they argued that although\ntenants wouldn\u2019t be paying\nthe fee up front, renters\ncould potentially feel that cost throughout the year in their\nmonthly rent.<\/p>\n\n\n\n

While renters praised the unexpected ban, it certainly\ncame as a shock to landlords and brokers across the state. Suddenly, landlords\nwere faced with difficult decisions on whether to use a broker at all.<\/p>\n\n\n\n

Renters had about a week to celebrate before they were forced to unzip their wallets again. The Real Estate Board of New York filed a lawsuit against the Department of State and, shortly after, Supreme Court Justice Michael Mackey issued a temporary restraining order on the week-old broker fee ban. The lawsuit was also supported by several big-name brokerages that felt the new law was enacted without considering key industry players and that it went against a real estate procedural norm.<\/p>\n\n\n\n

Meanwhile, the ban on the broker\u2019s\nfee for renters\nhas divided the real\nestate community in New York City. On the renter\u2019s side, the ban\naddresses the issue of continually rising prices of New York City real estate; as\nsuch, renters feel this ban relieves some of the financial pressures imposed\nupon them by extensive costs like broker fees and security deposits, which\ncould make housing costs a little more affordable.<\/p>\n\n\n\n

However, landlords and developers don\u2019t\nbelieve the ban will have a positive\noutcome. In particular, the\nban would make landlords responsible for adding the fee into any other existing\ncosts they might have already, such as property\ntaxes, maintenance and more.\nIf the ban is made official, landlords will act accordingly and raise the\nmonthly rent rates. And, if and when this happens, then the ban\u2019s original\npurpose to alleviate the financial stress of renters will be futile.<\/p>\n\n\n\n

In the meantime, the temporary restraining\norder is effective until at least March 13, 2020, when the Department of State\nis due for a response in court. Both sides will be allowed to present a fair\ncase in court. <\/p>\n\n\n\n

So, for at least the next few weeks, brokers can legally continue to request and collect commission from renters. However, what happens after March 13 is anyone\u2019s guess. Connect with PN Lawyers\u00a0here <\/a>to stay up to date.<\/p>\n\n\n\n

Authors:<\/strong><\/h4>\n\n\n\n
\"Taso<\/a><\/figure><\/div>\n\n\n\n

Taso Pardalis<\/em><\/strong> is a founding partner of the Law Offices of Pardalis and Nohavicka, a leading full- service NYC law firm with offices in Manhattan, Queens and WeWork. Taso may be a well-known attorney with many cases making headlines in major media outlets, but at heart, he is a true entrepreneur that believes in supporting the small business community. His areas of concentration are: Intellectual Property, Trademarks, Corporate, Business Law and Real Estate Law.<\/em>
______________<\/p>\n\n\n\n

\"Sofia<\/a><\/figure><\/div>\n\n\n\n

Sofia Stefanou<\/strong>\u00a0is a law clerk at Pardalis & Nohavicka. She is currently a student at NYU\u2019s Schack School of Real Estate. Sofia is a member of NYU\u2019s Undergraduate Real Estate Club, Women in Real Estate Club, and Hellenic Heritage Association. She is currently a member of the real estate law team at Pardalis & Nohavicka.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

NYC-based\u00a0boutique law firm\u00a0Pardalis & Nohavicka\u00a0brings the latest legal updates from the world of real estate to PropertyShark.\u00a0Pardalis & Nohavicka\u00a0handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions,\u00a0currently litigating and representing clients throughout the United States and around the world. February will certainly be memorable for…<\/p>\n","protected":false},"author":49,"featured_media":37300,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9499,376,328,796],"tags":[11097],"class_list":["post-37299","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal","category-new-york-commercial-real-estate","category-new-york-real-estate","category-how-to","tag-real-estate-law"],"yoast_head":"\nNew York Broker Fees: Legal or Banned? - PropertyShark Real Estate Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2020\/02\/26\/new-york-broker-fees-legal-or-banned\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New York Broker Fees: Legal or Banned?\" \/>\n<meta property=\"og:description\" content=\"NYC-based\u00a0boutique law firm\u00a0Pardalis & Nohavicka\u00a0brings the latest legal updates from the world of real estate to PropertyShark.\u00a0Pardalis & Nohavicka\u00a0handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions,\u00a0currently litigating and representing clients throughout the United States and around the world. 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