NYC Real Estate Group Sues to Block Tenant Broker Fee Protections
NYC Real Estate Giants Sue to Block Tenant-Amiable Broker Fee Law
New York,NY – A powerful lobbying group representing New York CityS real estate industry has filed a lawsuit to block a new law aimed at eliminating hefty upfront broker fees for tenants. The real Estate Board of New York (REBNY), along with several brokerages and landlords, filed the suit in manhattan federal court on monday, seeking to halt the law’s implementation six months before it’s set to take effect.
The lawsuit argues that the legislation, which passed the City Council with a veto-proof majority last month, infringes upon constitutional rights by prohibiting brokers from posting apartment listings online without explicit contracts with landlords. It also claims the law would invalidate existing contracts between landlords and brokerage firms that stipulate tenant-paid fees.
“This legislation infringes upon constitutional guarantees of free speech and contract rights by prohibiting brokers from posting apartments on online listings platforms without being explicitly contracted by a landlord to do so,” said Carl Hum, REBNY’s general counsel.
The law, which automatically became law after mayor Eric adams declined to sign or veto it, would shift the duty of paying broker fees from tenants to landlords or property managers. This change aims to alleviate the financial burden on renters, who are often required to pay fees equivalent to 15% of their annual rent upfront.
Supporters of the measure, including Councilmember chi Ossé, who sponsored the legislation, argue that the law is a crucial step towards making New York City more affordable and equitable for working-class residents.
“This lawsuit is a last desperate attempt by the real estate lobby to undermine the voices of city residents and maintain an irrational practice that nearly every other big city in the country does not allow,” Ossé said in a statement.
Mayor Adams has expressed concerns about the law’s potential impact on small landlords and the possibility of landlords passing the fee onto tenants through higher monthly rents.
The city’s Law Department stated that it will review the lawsuit onc it is indeed served notice.
This legal challenge marks the latest chapter in a long-standing debate over broker fees in New York City. REBNY previously successfully overturned a 2020 directive from the New York Department of State that aimed to eliminate tenant-paid broker fees.
The outcome of this lawsuit could have important implications for the city’s rental market, perhaps impacting both tenants and landlords.
NYC Broker Fee Ban Faces Legal Challenge: REBNY Leads Charge
New York, NY – A major legal battle is brewing over a new law aiming to ban tenant-paid broker fees in New York City.
The Real Estate Board of New York (REBNY), a powerful lobbying group representing the city’s real estate industry, along with several brokerages and landlords, filed a lawsuit on Monday seeking to block the law’s implementation. Originally scheduled to take effect in six months, the law passed the City Council with a veto-proof majority last month.
REBNY argues that the legislation infringes upon constitutional rights by prohibiting brokers from posting apartment listings online without explicit contracts with landlords. The suit also claims the law would invalidate existing contracts between landlords and brokerage firms that stipulate tenant-paid fees.
“This legislation infringes upon constitutional guarantees of free speech and contract rights by prohibiting brokers from posting apartments on online listings platforms without being explicitly contracted by a landlord to do so,” said Carl Hum,REBNY’s general counsel.
The law, which automatically became law after Mayor Eric Adams declined to sign or veto it, aims to shift the responsibility of paying broker fees from tenants to landlords or property managers. This change is designed to relieve the financial burden on renters, who are often required to pay fees equal to 15% of their annual rent upfront.
Councilmember Chi Ossé, who sponsored the legislation, defends the law as a crucial step towards making New York City more affordable and equitable for working-class residents.
“This lawsuit is a last desperate attempt by the real estate lobby to undermine the voices of city residents and maintain an irrational practice that nearly every other big city in the country does not allow,” Ossé said in a statement.
Mayor Adams has expressed concerns about the law’s potential impact on small landlords and the possibility of landlords passing the fee onto tenants through higher monthly rents.
The city’s Law Department stated that it will review the lawsuit once it is served notice.
This latest legal challenge marks another chapter in the ongoing debate over broker fees in new York City. REBNY previously successfully overturned a 2020 directive from the New York Department of State that also aimed to eliminate tenant-paid broker fees.
The outcome of this lawsuit could significantly impact the city’s rental market, affecting both tenants and landlords.