New rent laws leave ambiguity over application fee cap

September 3, 2019

Some real estate brokers in New York City continue to charge prospective renters more than $20 for application fees despite a new state law that prohibits landlords from doing so. The new measure, passed in June by state lawmakers as part of a major rent reform package, says a “landlord, sub-lessor or grantor” cannot charge applicants more than $20 for background and credit checks. But, as the New York Times reported on Monday, the language of the law does not specifically include brokers.

“The issue about the application fees, it just highlights ambiguities in the legislation,” Carl Hum, the general counsel for the Real Estate Board of New York (REBNY), told the Times. “It reflects what happens when there is not enough debate or scrutiny over a law.”

The package of bills passed in June was pushed through by Democratic leaders to address concerns of housing costs and inequality. It eliminated rules that let owners deregulate apartments, expanded tenant protections, and closed loopholes that permitted them to raise rents.

The real estate industry’s political influence faltered after the Republicans lost majority control in the Senate last November, making way for the landmark legislation. In July, a group of real estate groups and individual property owners filed a lawsuit to challenge the new laws, claiming they violate the 14th and Fifth Amendments of the U.S. Constitution.

After The City reported last month that brokers were still charging more than $20 for application fees, REBNY asked its members to have brokers limit excessive fees until regulators at the Division of Housing and Community Renewal reviewed the matter. And According to The City, the Department of State is looking into whether the $20 cap applies to brokers.


[Via NY Times]


More: Policy
Tags: Brokers

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