The fees for this apartment seem totally illegal

then call de blasio

You can thank the stupid NY lawmakers for this. Since landlords can't rely on tenant blacklists anymore, requirements for renters are becoming more stringent (ie, now need to fill out full financial statements, etc. for a freakin rental). Also the law was so hastily drafted (and most likely not reviewed by lawmakers at all) that there's many errors in there. For example, the limit on rental applications is only for landlords. It doesn't cover brokers or managing agents, which is why they can charge it.

will brokers overcharge and rebate to the owner become a new business model?

Every attorney i speak with has different interpretations about the fees and who can charge who. Until there is clarification by lawmakers every landlord will charge as they see fit. I am seeing some large managing agents for coops and condos now telling shareholders/owners that they should pay the processing fees for their lease applications and not pass it onto the applicants. on the rental properties if the apartment is in high demand and applicant fusses about the app fee, i have heard landlords move on to the next application. like bpc said they are more stringent on qualifications and about who they are giving keys to.