Illegal rental fees

Rebny is advising otherwise. This part of the law covers landlords but not brokers and managing agents

https://gothamist.com/news/nyc-real-estate-brokers-are-already-exploiting-a-perceived-loophole-in-new-rent-laws

This is precisely the kind of underhanded behavior that got landlords spanked in the legislature this June. It gives honest owners a bad name, esp when big tech companies like Compass lead the charge in saying they can ignore the law's clear intent.

I think the intent of the law is that the fees shouldn’t go in landlord’s pocket and credit/background check fees are limited to $20. One may take the law too far and say rental brokerage fees, if the broker is representing landlord, have to be paid by the landlord. But that is not the law.

For a long time NY Dept of State ruled that if a landlord sent a potential tenant to a broker saying "this is my exclusive agent" then that broker could not charge that tenant a fee. I don't know when that changed.

At this point there is serious consideration being given to capping rental brokerage fees by more than one governmental body. As such I think it is foolish to be poking the bear pi charging more than $20 on a credit check fee add feeding into the "greedy broker" trope.
https://www.cityandstateny.com/articles/policy/housing/will-new-york-city-council-cap-real-estate-broker-rental-fees.html-0

In this particular case, having all these fees in a rental building seems excessive to me. They are the type of fees I was talking about in the Coop Management thread, but this isn't a Coop/Condo. If I were a potential tenant looking to rent in this building it would definitely turn me away.

Landlords commonly hire rental brokers who charge renter a brokerage fee unless it is a no fee rental. It must be legal. How does one reconcile that with below?

“For a long time NY Dept of State ruled that if a landlord sent a potential tenant to a broker saying "this is my exclusive agent" then that broker could not charge that tenant a fee. I don't know when that changed.”

stupid lawmakers, it should curb the managing agents, not the owners

I am planning to go to a REBNY seminar on this tomorrow. I'm really curious, especially about the $20 limit, since it costs approx. $50 to run the kind of credit check that one, as a landlord, would want.

ali r.

I am guessing landlords will have to pay for the additional cost and build that into the rent.

It does not cost $50.00 to run the credit check.

https://www.nytimes.com/2019/09/03/nyregion/apartment-rental-application-fees.html

Who believes this part of that article:
"He said co-op boards typically charge $500 to $650 in application fees and collect a deposit equal to several months’ worth of maintenance charges. Now, co-op boards might decide to collect higher monthly charges from existing owners to offset the new restrictions on those fees, he said."

Coops don't really have a problem. Just raise the flip tax and assess it on sellers.

Take a look at the line item on the annual financial statement "income from application fees."

@streetsmart, corelogic will run an eviction history for twenty bucks, but if you want the potential tenant's credit report, or if you want the potential tenant to be able to pay directly (which protects their privacy, really, since brokers don't really want to be in the business of handling credit cards) it's going to cost more than that. Who do you use?

30yrs -- pretty obvious that lawyer is lobbying for private landlords and is trying to broaden support amongst constituents who are co-op owners against the new rental laws. Similar to hotel lobbyists making straw man arguments about AirBnB driving an affordable housing crisis.

I've seen dozens of co-op financials and application fees generally comprise <0.5% of average revenues (vs. >95% from recurring monthly shareholder maintenance fees).

@front_porch,
I use CIS information systems. It now costs about $23.00 for a credit report.
You can call them at 800-275-7722.
I would think that for companies that run a lot of credit reports, they would pay less.

onsite i believe has lowered theirs to $20.

Given the climate in NY that brought about the huge changes in the rental laws, I think that brokers are taking fees in excess of $20 at a real risk. I could very well see these excess fees needing to be refunded, and potentially even worse-getting fined or in other trouble for taking the excess fees. I get the desire for the additional $, but reading the tea leaves here, is this really worth the risk? I don't see operating in a gray area until you are told not to as the smart move here.

For those suggesting landlords make up for having fees taken away by raising rents, remember that this was part of enhancing Rent Stabilization so in many cases rent will be capped and can not be increased. One of the reasons for eliminating these fees was specifically so that landlords can't do an end around rent caps by using fees instead. It's also the reason why landlords didn't used to be able to tell prospective tenants that they had to use a specific broker - because for below market units brokers would charge huge fees and then kick back to managing agents.

And this is precisely why landlords should pay all brokers' fees by law.

My managing agent sent a notice indicating that the unit owners who rent their apartment will have to make up the difference for the credit report. In other words, pay $80.00.

The managing agent of my condo Halstead says that the $20 cap does not apply to managing agents and they will continue charging $600 application fee, $200 processing fee, etc to my renters. Can we get a legal opinion here, is this right?

None of this goes into the landlord's pocket to be clear. Halstead pockets all of it.