Latest York City’s recently enacted ban on broker fees charged to tenants is facing growing pains, with hundreds of complaints filed and limited refunds issued so far. The law, known as the Fairness in Apartment Rental Expenses (FARE) Act, aimed to shift the responsibility for paying broker fees from renters to landlords. However, implementation has been fraught with challenges, as evidenced by a recent case involving Israel Mendlewicz, a real estate broker with Urban Pads LLC and a growing backlog of unresolved complaints.
The FARE Act, passed by the New York City Council in 2024, stipulates that the party who hires the broker—typically the landlord—must cover the associated fees. This change was intended to alleviate the financial burden on renters, particularly in a city already grappling with high housing costs. The law prohibits landlords from charging tenants for the services of a broker they employ to list apartments. Violations can result in fines starting at $750 for first-time offenses, escalating to a maximum of $2,000. Despite the clear intent of the legislation, enforcement has proven demanding, leading to confusion and disputes between tenants, brokers, and landlords.
The case of Israel Mendlewicz highlights the complexities of the new regulations. Mendlewicz was ordered to return a $4,480 broker fee to tenants of a rent-stabilized Brooklyn apartment, after the city’s Department of Consumer and Worker Protection (DCWP) ruled against him in June. He argued that the tenants had directly engaged his services as a broker, a claim that ultimately failed to sway the administrative hearing. In addition to the refund, Mendlewicz was assessed a $750 civil penalty. He expressed frustration with the law, stating to the New York Post, “The tenant was out of town and was looking for an apartment – and agreed to hire me.”
FARE Act Complaints Surge, Refunds Remain Limited
As of March 13, 2026, the DCWP has received over 1,600 complaints and inquiries related to the FARE Act since it took effect last summer. Despite the high volume of complaints, only two cases have resulted in mandated refunds for tenants. The second case involved a $2,500 broker fee returned by an unnamed agent before an administrative hearing could be held, with the broker subsequently facing a $1,500 penalty. The DCWP has issued 53 summonses related to the FARE Act, indicating a growing effort to enforce the new rules. The agency maintains a dedicated team investigating complaints and determining which cases warrant administrative charges.
The distribution of complaints reveals a concentration in Brooklyn, with 67 reported to the city’s 311 service since June 2025. Queens followed with 46 complaints, Manhattan with 41, The Bronx with 28, and Staten Island with just four. This geographic disparity may reflect varying rental market dynamics and levels of tenant awareness regarding their rights under the FARE Act.
Broker Concerns and Potential Unintended Consequences
Mendlewicz, who is an Associate Broker with Urban Pads LLC according to the New York State Board of Real Estate (License #10301223094), voiced concerns that the new regulations are impacting his business and the real estate industry as a whole. He claims the law forces brokers to work harder to demonstrate their value to clients, requiring them to spend 6-8 weeks finding suitable tenants who can afford increasingly high rents. He too alleges that some landlords are attempting to circumvent the law by concealing broker fees within monthly rent payments. “They can’t afford to move out,” he said, “which adds to the shortage of the supply.”
According to a report released by StreetEasy in December, the FARE Act is estimated to have contributed to a 1.1% increase in rents. The report suggests that the ongoing citywide housing shortage is a primary driver of rent increases, but the FARE Act may be exacerbating the problem. StreetEasy’s analysis points to a complex interplay of factors influencing the New York City rental market.
Navigating the New Landscape: Tenant Rights and Resources
The FARE Act aims to empower tenants by eliminating upfront broker fees. However, understanding your rights and navigating the process of filing a complaint can be challenging. Tenants who believe they have been wrongly charged a broker fee are encouraged to file a complaint with the DCWP. The agency provides resources and guidance on its website, including information on the FARE Act and the complaint process.
City Councilman Chi Ossé, the sponsor of the FARE Act, has been actively communicating with constituents about the law and encouraging those who have been improperly charged to report it. In a January post on X (formerly Twitter), Ossé stated, “If you were forced to pay a broker fee and you reported it, your refunds are coming.”
Israel Mendlewicz also holds real estate licenses with Brick and Stone Nyc Realty LLC (License #10491213987) and Brickview Nyc Realty Nyv LLC (License #10491212449), in addition to his role at Urban Pads LLC. He also has a salesperson license with Urban Pads LLC (License #10401319224). His associate broker license with Urban Pads LLC is set to expire on March 7, 2026.
The DCWP has settled six additional FARE Act-related complaints prior to reaching a hearing, but refunds have not yet been issued in those cases. The agency is continuing to investigate complaints and pursue enforcement actions against brokers and landlords who violate the law.
Key Takeaways
- The FARE Act prohibits landlords from charging tenants broker fees for apartments they are seeking to rent.
- Enforcement of the FARE Act has been slow, with only two cases resulting in mandated refunds as of March 13, 2026.
- Brokers have expressed concerns that the law is impacting their businesses and potentially contributing to rising rents.
- Tenants who believe they have been wrongly charged a broker fee can file a complaint with the New York City Department of Consumer and Worker Protection.
The DCWP is expected to provide an update on the FARE Act’s enforcement efforts in the coming months. Tenants and landlords alike are encouraged to stay informed about their rights and responsibilities under the new law. The ongoing implementation of the FARE Act will likely continue to shape the dynamics of the New York City rental market.
What are your thoughts on the new broker fee ban? Share your experiences and opinions in the comments below.