The New York State real estate world has been thrown into chaos after a New York State opinion attempting to regulate the cost of renting an apartment may have killed an industry.
The law enacted in 2019, the Statewide Housing Security & Tenant Protection Act, prohibits a landlord’s agents from charging a commission on rentals.
This would not completely destroy the real estate rental market, but would rather force the landlords to pay the fees associated with the rentals, making them agents of the landlords.
So, tenant would now only have to come up with two months rent rather than three, which before was first months rent, security, and one month broker fee.
The problem is, that landlords can’t ask for more than one month rent in advance, forcing landlords to up the rent to cover the cost.
And if you had a prior landlord tenant eviction because you did not pay, or were a horrible tenant, that information cannot be used to decide if you should be a renter, or the landlord can get sued.
The opinion will likely not stand up in court, but is causing a stir in the real estate world. As many real estate agents work for the perspective tenants rather than the landlords, this opinion might not apply for Crown Heights.