New York City’s real estate industry is seeing the first wave of enforcement actions under the Fairness in Apartment Rental Expenses Act, but data suggests a significant lag between complaints and financial resolutions.
Since the law’s implementation last summer, the city has mandated only two broker fee refunds despite receiving hundreds of formal grievances from tenants, the New York Post reported. The city’s Department of Consumer and Worker Protection has processed more than 1,600 inquiries and complaints related to the regulations; these interactions resulted in 53 summonses, yet the actual return of capital to renters remains limited to two specific instances.
In one high-profile case, Israel Mendlewicz of Urban Pads was ordered to reimburse tenants a $4,480 fee he charged for a rent-stabilized unit in Crown Heights. The ruling followed an administrative hearing where the broker was also assessed a $750 civil penalty for violating the mandate.
A second, unidentified broker returned a $2,500 fee prior to an administrative hearing to avoid further litigation. The agent was subsequently required to pay $1,500 in penalties as part of the resolution with the DCWP.
Beyond the two refunds, the DCWP confirmed it settled six additional complaints that have yet to result in actual disbursements to tenants.
Councilperson Chi Ossé, the sponsor of the legislation, reassured constituents in January that further refunds are forthcoming for those who have reported violations.
Data from 311 records indicates that Brooklyn is the epicenter of fee-related disputes, accounting for 67 of the 186 broker fee complaints filed since June. Queens and Manhattan followed with 46 and 41 complaints, respectively.
The FARE Act, passed by the City Council in 2024, shifted the financial burden of brokerage services to the party that hires the professional. For most residential listings, this effectively prohibits landlords from passing their broker costs onto prospective tenants.
Industry professionals expressed frustration with the requirements, citing increased difficulty in demonstrating the value of their services to clients. Mendlewicz noted the regulations require brokers to work significantly harder to secure qualified tenants while facing the risk of direct landlord interference or tenant complaints.
Market analysis suggests the legislative change is also impacting broader economic indicators within the city’s housing sector. A December report from StreetEasy estimated that the FARE Act has contributed to a 1.1 percent increase in average rents.
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