Renting

Readers weigh in on banning broker fees

New York City passed the legislation to remove the burden from tenants, if the landlord hired them. But Massachusetts already has a similar law in place.

There are ways in which landlords can make sure that paying broker fees won’t affect their finances, which may have the consequence of raising the rent. Adobe Stock

By Sury Chakraborty

November 29, 2024

3 minutes to read

Earlier this month, the New York City Council passed legislation to force landlords to play broker fees instead of tenants unless the renter hired the agent.

Prior to this, tenants had to pay a commission upfront, which went up to 15 percent of the yearly lease.

Douglas Quattrochi, executive director of the trade organization Mass Landlords, said there are 2,500 members in the organization, and they don’t require their renters to pay broker fees. “If we hire a broker, we pay for it ourselves, because that’s the way it should be.”

In Massachusetts, it is already illegal for a landlord to hire a broker and require the renter to pay for it, Quattrochi said. “There shouldn’t need to be another law … because the law is already pretty clear in our view.”

Chapter 186 Section 15B, states that no landlord can take anything but the first and last month’s rent, a fee for the cost of a new lock and key, and a security deposit from tenants at the beginning of the tenancy.

But sometimes renters still end up paying the broker fees.

When people are desperate to get an apartment or keen to beat the competition, they will pay unlawful fees or do things that otherwise aren’t standard in the market, Quattrochi said.

In Boston’s fairly competitive rental market, where half of the renters are cost-burdened, people do what they can to secure an apartment, as we reported in July.

“I don’t think we need a law. I just think someone needs to enforce the law that we already have,” Quattrochi said.

Demetrios Salpoglou, CEO of the online marketplace Boston Pads, said New York City’s decision on broker fees may not have an immediate effect on Boston, as the market conditions are different.

There are ways in which landlords can make sure that paying broker fees won’t affect their finances, which may have the consequence of raising the rent.

“One of the things that landlords may do is simply say: ‘OK, well, I’ve been renting my property this way for 20 or 30 years, and I’ve never paid a broker’s commission. Now they want me to pay the broker’s commission. I’m just going to raise my rent to cover the broker’s commission,” Salpoglou said.

At its core, this is a demand-supply issue, he said. A landlord is more motivated to pay the broker fees or even reduce the rent for a unit if it remains on the market for a long time.

“I think that 90 percent of our effort should be focused on the solution, which is building abundant supply,” he said.

We asked Boston.com readers what they think about the New York City Council’s decision, and whether Boston should follow in its footsteps.

In our survey, 58 readers responded “No,” and 93 readers said “Yes.”

Responses have been edited for grammar and clarity.

Do you think Boston should ban renter-paid broker fees?

Yes

“These fees are outdated. Most individuals find apartments via the internet, and even when a broker is involved, their obligations are significantly less than in years past. This is not to mention the expensive fees making it even more difficult for young people and families seeking more affordable housing.” — Quinn, South Boston

“It’s exploitative, and many brokers try to charge illegally. Plus the rent itself is insane, the landlords can afford it.” — Kaj Peltonen, Boston

“A renter is not hiring a broker to find them an apartment. The landlord is the one hiring the broker to find a tenant to fill a vacant apartment. If a tenant pays a broker fee, the landlord is receiving a service for free. It makes no sense!” — Jack L., East Boston

No

“Landlords will just recover the amount by increasing the rent … and it’s not like they’ll reduce the rent afterwards. This will not end up saving renters money.” — Rebecca, Brookline

“It is a good way to know if the tenant can afford the apartment.” — Pat White, Boston

“This will ONLY raise rents. Free economy works best when there are safe guards in place but NOT too rigid rules. NYC is a disaster when it comes to rental laws. Most rent stabilized and rent-controlled units are in the hands of people making over $250,000.” – Andrew, Back Bay