I went to a showing for a no-fee rental. Why did the agent ask for a broker fee?
- If you’re working with a different agent than the one who listed the property, they may ask you to pay a fee
- You can always negotiate a fee and you can report unscrupulous agents to the Department of State
You can complain about a broker or agent to the New York Department of State.
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I found a rental that looked great online, and I was happy that it was listed as no fee. But when I toured the unit, the agent told me that I would be expected to pay a fee. Is this legal?
Broker fees are an annoying fact of renting a New York City apartment. These fees can be a huge hurdle for any renter, but there is one legitimate reason why an agent would ask you for a fee at a no-fee unit.
If you hired an agent or a broker, and asked them to arrange a tour of this no-fee apartment, they may ask you for a fee for their services. The amount commonly ranges from 10 to 15 percent of the annual rent.
If a tenant “were to go to that property represented by a broker they engaged on their own, then they might be responsible to that broker for a fee, even if the advertisement says there's no fee,” said Douglas Wagner, director of brokerage services at Bond New York.
Contrary to what it sounds like, a no-fee listing doesn’t mean that an agent isn’t getting paid. Instead, the landlord has agreed to compensate the agent who has listed the apartment (but not a person you hire).
In your situation, it seems like you found the no-fee unit on your own. You shouldn’t be asked to pay up since the landlord is covering that cost, Wagner added.
“Consumers who contact the listing agent directly, without being represented by a broker, are able to rent the apartment without paying a broker fee (because the landlord pays the broker),” Wagner said.
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A fee flip-flop
If an agent claimed the apartment was no fee and then asked for a fee, they could be violating state regulations that require listings to be accurate, as well as the Real Estate Board of New York’s code of ethics.
In that case, you should make a complaint to the New York Department of State (DOS), Wagner said. You can fill out the DOS’s online form and email it to their complaints department, or mail it in to the Division of Licensing Services, which could suspend or revoke the agent’s license.
You could also complain to the New York Attorney General, but outside of making a complaint there’s not much else you can do, said Jeffrey McAdams, a tenant attorney at McAdams Law.
If you still want to take the apartment, Wagner recommends trying to negotiate a lower fee.
Fees are always negotiable and there’s no limit on what a broker or agent can request for fees. There have been past attempts to regulate fees, including a bill pending before the New York City Council that would require whoever hires the broker to pay for their services.
