After New York City banned tenant-paid apartment broker fees, Boston-area politicians are looking to end the practice in their cities, too. iStock illustration
Gov. Maura Healey has put political capital behind eliminating apartment broker fees, but state legislators have backed two wildly different ways to make that happen.
The push to eliminate broker fees in Massachusetts suddenly accelerated earlier this year after the New York City Council voted to shift responsibility for paying apartment brokers from renters to landlords. City councilors in Boston and Cambridge sought Beacon Hill’s permission to end the practice in their communities, and Healey herself put a measure in her budget proposal to end renter-paid broker fees statewide.
The Greater Boston Real Estate Board is also on record supporting the idea, but some landlord leaders say rents could have to rise to compensate for any such move.
Agents typically charge the equivalent of one month’s rent in an apartment. According to Redfin, the median asking rent was $2,787 in March, meaning that renters could be forced to pay over $5,000 dollars to move into a unit when the broker fee is added to the traditional first month’s rent and last month’s rent often paid up front, or even more if a security deposit is required.
Leaders in both the state House and Senate say they’re on board with the idea, going so far as to attach it to their must-pass budget bills. But state representatives’ version has two loopholes that would make it very easy for landlords – who hold significant market power in this inventory-starved rental market – to find ways to keep making tenants foot these bills.
The House bill states that tenants or prospective tenants can not be charged a broker’s commission or fee, including a scenario where the broker has been working with the landlord to market the unit exclusively.
But if a prospective tenant initiates contact with an agent by responding to an advertisement or listing, they would be responsible for the fee under the House’s version.
Additionally, if the prospective tenant received a rental brokerage fee disclosure from the broker and agreed to the terms and conditions of the brokerage fee disclosure in writing, they would be responsible for paying the fee.
Compared to the most recent version of the Senate Ways and Means Committee’s proposed budget bill makes it much more difficult for landlords to charge broker fees to tenants, largely in line with Healey’s proposal.
“Any fee shall only be paid by the party, lessor or tenant who originally engaged and entered into a contract with the licensed broker or salesperson,” the bill states.
