Ask Altagracia: If I pay a broker’s fee that a landlord should cover under the FARE Act, can I get a refund?
- Don’t pay a broker’s commission if you didn’t sign a contract agreeing to hire them
- If you have already paid, you can write a demand letter to recover illegal fees
- Ask the agent to confirm in writing who hired them and who is responsible for their fee
The penalty for a broker who illegally collects a broker fee can range from $500 to $2,000. If you have paid a fee that’s been illegally requested, you can write a demand letter to the agent for a refund.
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An agent representing an apartment I’m interested in says I have to pay their fee to see or rent the place. I thought the new broker fee law requires a landlord to cover commissions. If I pay the fee just to get a viewing, am I supposed to get my money back later?
If you did not hire the agent to help you search for the apartment you do not pay the fee. “It is illegal for landlords to charge real estate broker fees for rentals,” said Altagracia Pierre-Outerbridge, attorney and founder of Outerbridge Law representing residential tenants, condo owners and landlords.
So the most important takeaway is that under the Fairness in Apartment Rentals (FARE) Act, passed earlier this year, you do not pay a fee to the agent if you did not hire them. The change comes after years of debate over high upfront rental costs, where broker fees are often equal to one month’s rent or more.
Making a complaint against a broker
If you are being asked to pay an agent you didn’t hire, you can file a complaint with the Department of Consumer and Worker Protection. The penalty for a broker who illegally collects a broker fee can range from $500 to $2,000.
Writing a demand letter is often effective
If you have paid a fee that’s been illegally requested, you can write a demand letter to the agent for a refund.
“In most cases the letter itself will get the broker to return the money,” Pierre-Outerbridge said. This is because a broker’s license is very valuable and most do not want a complaint to put their license at risk of being revoked.
In addition to fines, agents face license suspensions for violations such as fraud, misrepresentation, criminal activity, and failing to disclose financial interests. “Even if you hire a broker you can get your money back if the apartment has been misrepresented,” Pierre-Outerbridge said. She cited a situation where a renter has moved in and there are already people living in the apartment. This type of misrepresentation requires a letter to the broker explaining why you want to break the lease and that you want a refund for any fees paid.
“The broker has a fiduciary duty to properly advise the renter and if they don’t, you can tell them you will file a complaint against them,” Pierre-Outerbridge said. This is usually an effective way to get your money back.
Ensuring broker fee transparency
Renters often fear losing the apartment if they push back but it’s also important to indicate to a broker that you know your rights. Before paying anything, ask the broker to confirm in writing who hired them and who is responsible for their fee. “If the landlord hired the broker, you are not required to pay,” Pierre-Outerbridge said.
Altagracia Pierre-Outerbridge, Esq. is the owner of Outerbridge Law P.C, focusing primarily on tenant representation. The firm represents all sides in landlord-tenant litigation and transactional matters such as month-to-month holdovers, nuisance cases, licensee cases, harassment claims, repair cases, tenant buyouts, succession claims, DHCR overcharges and rent reductions and more. Pierre-Outerbridge has 15 years of experience litigating in Supreme, DHCR, and Housing Court. To submit a question for this column, click here. To contact Outerbridge Law P.C. directly, call 212-364-5612 or 877-OUTERBRIDGE, or schedule a meeting today.
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