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The New York City Council passed a bill that will change the responsibility for broker fees from the renter tenant to the landlord.

According to combined media reports, the legislation dubbed the Fairness in Apartment Rental Expenses (FARE) Act, requires landlords to pay the fee when they hire a real estate broker to market their properties. The new legislation also includes when a broker publishes a listing with the landlord’s permission. If a tenant is required to pay fees, the amount needs to be disclosed in both the listing and rental agreements. Landlords who violate the new rules can face penalties.

Previously, New Yorkers were required to pay 15% of their annual rent on broker fees The legislation passed in a 42-8 vote.

Mayor Eric Adams warned the law did not prevent landlords from incorporating the broker fee’s costs into a tenant’s rent.

“Think for a moment: if you pass the cost on to the small property owners, nothing in that law stops them from building it into their rent, so it goes from a one-time fee to a permanent fee,” Adams said.

The Real Estate Board of New York came out against the bill, issuing a statement that it will “make it harder for tenants to find housing, raise rents, and make the hard work of real estate agents even more difficult.”

Councilmember Chi Ossé, who introduced the FARE Act, defended the legislation by noting most US cities have this payment structure.

“Forty seven percent of homes for tenants in New York City are rent stabilized, so it would be illegal for landlords to bake the fee into rent in that case,” Ossé said. “In addition to that, rents are set by market forces, not by what landlords could charge. If your landlord could increase your rent tomorrow, they would have done so yesterday. They’re not holding back, who are we kidding.”