After weeks of brokers who match tenants with landlords claiming a cap on application fees does not apply to them, a state agency declared Friday that, actually, it does.
The Department of State (DOS) issued a fact sheet on the Housing Stability And Tenant Protections Act of 2019, dispelling confusion over a key provision of New York’s recent rent law overhaul: A licensed real estate brokers and salespeople acting as an agent of the “landlord, lessor, sub-lessor or grantor” is now prohibited from collecting an application fee greater than $20, according to DOS. The clarification is among a handful of “guidance” the agency is disseminating to real estate agents across the state.
“The new laws are a broad collection of provisions that increase tenant protections for all New Yorkers,” New York State Secretary of State Rossana Rosado said in a statement. “The Guidance will help the real estate industry and other interested parties understand the new law and apply it correctly for the benefit of current and prospective tenants.”
Carl Hum, the general counsel with the Real Estate Board of New York (REBNY)—a powerful trade association for the industry—had argued that the law did not explicitly name brokers and “by a strict reading of the law, brokers are excluded” for the cap, he told Curbed in August. But lawmakers and tenant advocates blasted REBNY for what they say is a “disgusting” misreading of the bill that sought to create a loophole in the law.
Now, according to DOS, if a licensed agent collects a fee greater than $20 or fails to disclose to a landlord that such fees are prohibited they “may be subject to discipline.” In the event that a prospective rent regulated tenant is charged beyond that amount, the would-be renter can seek relief through the state’s Homes and Community Renewal office.
DOS also acknowledges that the rule does not apply to agents hired by a prospective tenant, or to co-op and condo sales.