City spreading the word on broker fee ban

Courtesey Council Member Chi Ossé

Courtesey Council Member Chi Ossé

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Claire Schlissel is the first New York City renter to be reimbursed under the Fairness in Apartment Rental Expenses (FARE) Act, a law that outlaws the practice of landlords charging broker fees to tenants in New York City. Schlissel, an artist, found an apartment in Brooklyn’s Prospect Heights neighborhood last year, but was forced into using a broker. 

Knowing broker fees are illegal, Schlissel brought up the FARE Act with the broker, but he never got back to her about it. In the meantime, she communicated with city officials in the Department of Consumer and Worker Protection about the apartment and ended up “basically playing dumb,” she said, moved forward with the apartment and documented all of her communication with the broker.

She signed a two-year lease to ensure that her apartment was secure and then sent everything to the city officials. A few weeks later, she said, she received an email from the broker, who said he’d received a summons to appear in court and begged her to settle it out of court.

Schlissel ignored the broker's pleas and later received a call from the city alerting her that DCWP had gotten back the $2,500 broker fee and that the city would fine the apartment building. A few weeks ago, she received her money.

Even with worries of retaliation and the $2,500 she paid for the broker fee, which she knew was illegal, she said she wanted to “prove a point.” 

“I hope it means something,” she said. “I hope it inspires other people to do the same thing.”

'Reach people where they are'

It’s been almost eight months since the FARE Act took effect, outlawing broker fees across New York City, but the bill’s lead sponsor and the city agency tasked with carrying it out are still working to get the word out and ensure compliance.

Mayor Zohran Mamdani signed an executive order in January establishing “Rental Ripoff Hearings,” where New Yorkers can speak out about poor housing conditions and their landlord problems. And City Council Member Chi Ossé, who fought tooth and nail to pass the FARE Act, is promoting the law ahead of the hearings. 

Ossé, city council’s youngest member ever and a democratic socialist, recently teamed up with Department of Consumer and Worker Protection Commissioner Sam Levine to tout the law’s accomplishments, advertise the ban on broker fees and call for more funding and staff at DCWP.

In a snappy, short-form vertical video, a medium where Ossé has flourished, the council member said “bad actors are scared as shit.” 

Since the law took effect in June, the agency has enforced around $7,000 in restitution, received more than 1,400 complaints against illegal broker fees and has filed 50 summonses to real estate brokers, property managers or landlords for violating the law, according to DCWP.

In recent months, the number of complaints related to the law has dropped from more than 50 to under 25, Levine said. He hopes this indicates more compliance, but he wants to ensure that’s the case. 

Levine told The Chief that his agency is working with Ossé to ensure that renters aren’t “getting ripped off” and landlords and brokers know the DCWP is tracking the market and ready to enforce the law. With the video, he wants to “reach people where they are.”

“We want to communicate these concepts in a clear way,” Levine said. “Nobody has been better at this than the council member Ossé.”

But the law didn’t come without side effects. Rent increases spiked, much more than usual and frequently by hundreds of dollars per month, in the week after the FARE Act took effect, The New York Times reported in July.

However, rental site StreetEasy, which publicly supported the law, released a report in December estimating the FARE Act increased rents by only 1.1 percent.

Levine said the verdict is still out on whether the law raised rents and that it didn’t just move money from one side of the ledger to another. 

“Broker fees, across multiple dimensions, distorted the market for rental housing,” he said. “I think over the long term, you’re going to see the FARE Act result really in a better functioning, more efficient rental market.”