Real Estate Board Sues New York City Over Broker Fee Law

The Real Estate Board of New York (REBNY) and other industry groups have filed a lawsuit against New York City to block the Fairness in Apartment Rentals Act (FARE), which shifts the burden of broker fees from tenants to landlords. This law, set to take effect in July 2024, aims to alleviate upfront costs for tenants but has drawn criticism from brokers and landlords who argue it could lead to increased rents and unintended market consequences. Plaintiffs claim the FARE Act violates the First Amendment and Contracts Clause of the U.S. Constitution by infringing on commercial speech rights and existing contracts. The suit was filed in federal court, where REBNY hopes to halt the law's implementation. Supporters of the law argue it will protect tenants from excessive fees, but opponents warn it could destabilize the rental market. The city's Law Department plans to review the lawsuit upon receipt.