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No Broker Fee?



"In an update made last week to the state’s recent rent reform laws, the Department of State said real estate brokers hired by landlords could no longer charge tenants a fee. The ruling sparked a widespread backlash from the real estate industry, particularly rental brokers. In response, a group of industry representatives filed an Article 78 petition in Albany, which resulted in a temporary restraining order on Monday, The Real Deal reported. The Real Estate Board of New York (REBNY) and a number of high-profile brokerages have filed a lawsuit claiming the new guidance was an “unlawful, erroneous, and arbitrary” interpretation of the rent reform law passed in June and wreaked “havoc and confusion” on the industry. The restraining order means agents acting on behalf of landlords can collect a commission from tenants until further notice without fear of discipline by the DOS.)."

I think it's pretty extreme the way things went down. I mean absolutely no notice and you have thousands of potential transactions with tenants & landlords confused. Rental listing brokers work very hard and make a living by commonly collecting a fee from prospective tenants which is the norm seeing rarely do landlords pay the fee. At the end of the day, it's a negotiation however when there's limited supply and the next guy (or gal, or other <3) in line says he has absolutely no problem paying the fee well then that original prospective tenant could miss out. Supply and demand folks, very simple. However, what seems to be overlooked is the outcome if this law were to stay in place. I'm not worried about rental brokers as their value is still very well warranted however its what effect will it have on rental rates? Think about it. The landlord would be inclined to raise rents to make up for the additional expense which comes out of who's pocket -- the tenants.



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