On June 10, 2025, one day before New York City's new broker-fee law took effect, a Compass agent who represents more than 50 rental buildings across Manhattan raised the rent on a two-bedroom Upper East Side listing from $3,500 to $3,695. Nothing about the apartment changed. The layout was the same, the building was the same, the amenities were the same. What changed was who was legally required to pay the person who listed it. The agent, James Finelli, told The Real Deal at the time that the math was simple: if the landlord now had to cover the broker's commission instead of the tenant, the commission had to go somewhere, and it went into the rent.
Fourteen months later, that roughly 5.6 percent increase looks less like a one-time adjustment and more like the opening move in a pattern that has kept playing out across the neighborhood. The Fairness in Apartment Rental Expenses Act, known as the FARE Act, was built on a simple principle: whoever hires the broker pays the broker. On paper, that meant Upper East Side renters would stop handing over thousands of dollars at lease signing for a service they never asked for. In practice, the law changed who pays the broker directly; asking rents may also reflect landlords' costs.
The Fee Was Never Small Here
Before the law took effect on June 11, 2025, the Upper East Side carried some of the steepest broker-fee norms in the city. Tenants routinely paid 12 to 15 percent of annual rent to a broker the landlord had hired, a structure that made the neighborhood's proximity to Central Park and its stock of prewar and postwar rental buildings feel even more expensive at the moment of signing than the monthly rent alone suggested.
Run that percentage against a representative Upper East Side apartment. The neighborhood's core rental band sits between $3,000 and $6,000 a month, so take a $4,000-a-month unit, close to where the median Manhattan rent stood in June 2025. Twelve percent of $48,000 in annual rent is $5,760. Fifteen percent is $7,200. That was the number due before a tenant ever got a key, on top of first month's rent and a security deposit.
That upfront number is what the FARE Act eliminated for tenants who don't hire their own broker. How asking rents may reflect landlords' costs is the part worth working through.
The Trade Nobody Runs Before They Sign
Landlords who now owe the commission have two ways to recover it: absorb it as a cost of doing business, or fold it into the asking rent. Reporting from the weeks after the law took effect found that formerly fee-bearing listings across the city saw rent increases as high as 10 percent, while listings that were already no-fee saw far smaller adjustments. StreetEasy's own economist put the citywide gap at a more modest 5.3 percent for brokered listings versus 4.6 percent for the rest of the market in the law's first weeks, a smaller spread than landlords initially threatened but still a real one.
Here's what that spread means in dollars on the same $4,000 apartment, using the range documented in that reporting.
| Scenario | Old upfront fee (12-15% of annual rent) | Rent increase to cover it | Extra cost per year | Years to break even |
|---|---|---|---|---|
| Modest repricing (+5%, close to the documented UES example) | $5,760 to $7,200 | $200/month | $2,400 | 2.4 to 3.0 years |
| Aggressive repricing (+10%, the high end reported for formerly fee-bearing units) | $5,760 to $7,200 | $400/month | $4,800 | 1.2 to 1.5 years |
At the modeled increases, added rent matches the old fee after 2.4 to 3 years at 5%, or 1.2 to 1.5 years at 10%. For someone who moves every twelve to eighteen months, which is not unusual in a neighborhood with this much rental turnover, the comparison depends on the size of the rent increase. A renter comparing today's "no fee" listing against what they remember paying in 2024 needs to compare total cost over their actual expected stay, not the sticker price on day one.
Why the Upper East Side Shows It More Than Other Neighborhoods
If the fee simply migrated into rent, the increase should show up hardest wherever the old fee took the biggest bite in dollar terms, which is larger apartments with higher base rents. The most recent Upper East Side rent data, tracked through July 2026, breaks down unevenly by bedroom count in a way that lines up with exactly that pattern. Studio rents were up just 1.67 percent year over year, one-bedrooms were up 7.32 percent, but two-bedrooms jumped 16.34 percent, from a median of $6,232 to $7,250. Three-bedrooms rose a modest 2.30 percent and four-bedrooms barely moved at 0.22 percent.
Two-bedrooms are precisely the segment where a 12 to 15 percent commission generated the most cash for a broker under the old system, and precisely the segment showing the sharpest repricing under the new one. That's not proof of a single cause. Rent growth responds to demand, inventory, and seasonal timing too, and Manhattan's overall rental supply has tightened since the law passed, with new listings down roughly 35 percent in the months after it took effect. But the size and direction of the two-bedroom spike is consistent with what you'd expect if the highest-fee segment absorbed the largest share of the shift, and it matches the building-level pattern Finelli described in his own portfolio.
Separately, average rent across the Upper East Side reached $5,207 as of June 2026, up 6 percent year over year, a pace of increase that outstrips general inflation and suggests the market has not simply returned to its pre-2025 baseline with the fee quietly deducted.
Understanding "No Fee" Listings
A listing marked "no fee" today means the tenant is not paying a broker directly. It does not mean the total cost of moving in is lower than it would have been in 2024, and it does not guarantee the listing is fully compliant. The NYC Department of Consumer and Worker Protection requires landlords and their agents to give tenants a signed, itemized disclosure of every fee before a lease is signed, and that disclosure has to be kept on file for three years. If a listing hasn't produced one, that's worth asking about directly.
The agency has also flagged a pattern of landlords relabeling the old fee rather than eliminating it, folding it into "administrative," "processing," or "move-in" charges that function the same way a broker fee once did. Complaints to the department passed 1,400 within the law's first eight months, with roughly 50 summonses issued and a small amount of restitution paid back to tenants. If a fee shows up under a new name and the dollar amount looks familiar, it's reasonable to ask what it actually covers.
The Appeal Is Still Open
The Real Estate Board of New York sued to block the FARE Act on First Amendment and state preemption grounds. A federal judge dismissed that challenge in June 2025, finding the objections amounted to policy disagreement rather than a constitutional claim. REBNY appealed to the Second Circuit, which heard oral arguments in November 2025. As of the most recent reporting on the case, from earlier this year, the court had not yet issued a ruling. It's a detail worth tracking if you're planning a move on a longer time horizon, since the underlying rules could still shift.
What This Means If You're Renting Here Right Now
The FARE Act changed who pays the broker directly; asking rents may also reflect landlords' costs. Whether the new system reduces a renter's total cost depends on the rent increase and length of stay; under the modeled scenarios, added rent reaches the old fee amount after 1.2 to 3 years.
A useful question to ask on any Upper East Side listing today is how any added rent, multiplied by however long you plan to stay, compares with what a 12 to 15 percent fee would have cost you upfront. That's a useful calculation to make before comparing listings.
If you're weighing a move on the Upper East Side and want someone to run those numbers against a specific building or lease term before you sign anything, Irene Sarri works through exactly this kind of comparison with clients every week. Let's Connect.
FAQ
Does the FARE Act apply if I'm renewing my current lease rather than signing a new one? The law's obligations attach to whether a landlord's agent is charging the fee after June 11, 2025, not to when the original lease was signed. A landlord or their broker cannot charge a renewing tenant a fee for the landlord's broker after that date, even if the original lease predates the law.
Can I still hire my own broker if I want dedicated help finding a place? Yes. The FARE Act only prohibits a landlord's agent from charging a tenant who didn't hire them. If you engage a broker directly to represent your search, you and that broker agree on the fee, and you pay it because you're the one who hired them.
What should I do if a listing tries to charge me an "administrative" or "processing" fee that looks like the old broker fee? Ask for the written description required under the law's disclosure rules before you sign anything. If the fee doesn't match a legitimate cost like a credit or background check, it can be reported to the NYC Department of Consumer and Worker Protection.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
