If it’s not the broker, don’t fix it.
A group of Big Apple real estate brokers is suing the city over a new law that shifts the burden of expensive broker fees away from tenants — and the case could prevent the law from taking effect this summer as planned .
The Real Estate Board of New York (REBNY) and other groups representing brokers and landlords filed a lawsuit on Monday in an effort to stop a controversial bill, called the Fairness in Apartment Rental Act (FARE), from passing in the City Council. Happened. Veto proof majority of 42-8 On 13 November.
“While the RENT Act may have the ‘right intentions’, it will wreak havoc on New York City’s rental markets and lead to many unintended consequences, causing immediate and irreparable harm to the consumers it is intended to protect, as well as brokers.” “And homeowners around the city,” the lawsuit alleges.
The law states that the person hiring the broker, rather than the potential tenant, will pay the fee.
Proponents hope it will ease the city’s housing affordability crisis, while opponents argue it could actually drive up rents.
Although it is scheduled to take effect next July — 180 days after City Council approval — a Manhattan federal court lawsuit could block the law until further notice, experts said.
David Schwartz, a New York City trial lawyer and lobbyist, told The Post, “Even though the (real estate) industry is overburdened in court… they (brokers) get a chance because the merits are in the industry’s favor.” The judge could potentially stop the law from taking effect.
“This law is another attempt by our local government to micromanage the freedom of parties to enter into contracts and this law violates the Contract Clause and the First Amendment of the U.S. Constitution, and is pre-empted by state law. There is also,” Schwartz added.
But attorney Altagracia Pierre-Outerbridge, whose practice focuses on landlord-tenant litigation, called the lawsuit’s arguments a “long shot” and an “uphill battle against City Hall.”
To stop the law from taking effect, REBNY lawyers would have to prove it would cause irreparable harm to brokers, he said.
Pierre-Outerbridge said, “The First Amendment speech-restriction challenge must overcome the fact that the law is not trying to suppress any viewpoint or idea, or force brokers to express an idea. ,” and there are other city rules on real estate brokers, like the part of the City Human Rights Law that outlaws some discrimination in real estate.
“The ultimate argument is that the government is not allowed to pass a law that voids contracts,” Pierre-Outerbridge said, “but the government is allowed to pass laws that affect what contracts are allowed to say – specifically.” “Moving on to contracts that haven’t been written yet.”
The city has about 20 days to respond to the lawsuit.
“The Rent Act is bad policy and bad law,” charged Carl Ham, attorney and senior vice president of REBNY.
“This law will not only drive up rents and make it harder for tenants to find housing, but it also violates constitutional guarantees of free speech and contract rights” – prohibiting brokers from posting rental listings online without permission from the landlord. Stopping, we told The Post.
Mayor Eric Adams — who did not veto or sign the bill by Friday’s deadline, making it automatically law — himself had previously expressed skepticism about the Rent Act, suggesting that property owners only Hiring a broker can defray the cost of leasing.
New York City is one of the only cities where landlords can hire a broker and pass the cost of renting to the tenant, a portion of the upfront costs. All-time high average of $13,000 This year, according to a recent analysis from rental website StreetEasy.
“This bill is common sense,” Brooklyn Council Member Chi Ossey, who sponsored the bill, previously said of the legislation. “It reflects how every other transaction exists in this country.”
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