Can a broker demand a ‘refundable’ fee to show an apartment?
- Landlords and brokers can't require payment to 'reserve' a unit, even if they claim they’ll refund you
- A request for money before you even see an apartment could be a sign that you're getting scammed
Don’t be afraid to walk away if you think you’re getting scammed.
iStock
A broker asked me to pay a $100 refundable application fee in order to see an apartment. They said it would be refunded if I didn’t take the place. Can brokers or landlords require a fee for a showing?
It’s unethical to ask a renter to pay to see an apartment, and it’s an indication that you might be getting scammed.
A landlord or their broker can’t ask you to pay a fee to reserve a unit, according to the New York State Department of Homes and Community Renewal. And a broker or landlord who asks you for more than $20 for an application fee—even if they claim it’s refundable—is likely violating the rent reforms passed in 2019.
A request for a deposit to view an apartment could very well be illegal and grounds to discipline the broker, according to the Department of State (DOS) which regulates apartment brokers. However, a spokesperson for the department noted that DOS would need more information to investigate the potential violation.
[Editor's Note: Realty Bites tackles your NYC rental questions. Have a query for our experts? Drop us an email. We respect all requests for anonymity.]
What fees can a broker or landlord ask for?
Landlords can ask you for a $20 application fee to cover the cost of a credit check—or more if you’re renting in a condo or co-op building—and for first month’s rent and a security deposit once you qualify for the apartment.
If you do pay the viewing fee, you risk losing your money or getting stuck with other surprise bills in the future, said Dawn David, a broker at Corcoran.
“As a potential applicant, I would not do it,” David said. “It’s just a telltale sign of what’s to come and what unexpected fees are going to be hidden in the process moving forward.”
Neil Garfinkel, an attorney and broker counsel for the Real Estate Board of New York, answered a similar question for REBNY’s newsletter back in 2020. He wrote that the collection of fees to “reserve” an apartment is illegal “regardless of whether such payment is refundable or non-refundable.”
What do I say to a broker who wants me to pay to see the place?
There’s a chance the broker or landlord is ignorant of the law, so Bond New York’s managing director Brian Hourigan recommends letting them know and requesting to see the apartment without paying (provided you’re still interested).
“If I was a prospective renter, I would simply say to the agent: ‘Hey, I'm very serious about checking out this apartment, but I know I shouldn't have to put anything down,’” Hourigan said. “Approach them from a position of education and enlightenment, as opposed to a threat.”
Don’t be afraid to walk away if you think you’re getting scammed, or if the broker seems sketchy, David said. If the broker persists, you can also report them to the DOS, Hourigan added.
“If they remain intractable, I do think that they would deserve to be investigated,” Hourigan said.
