The FARE Act lawsuit is Real Estate Board of New York, Inc. v. City of New York, No. 24-CV-9678, a federal challenge filed in the Southern District of New York by REBNY seeking to block the city’s Fairness in Apartment Rental Expenses Act before it could take effect. On June 10, 2025, U.S. District Judge Ronnie Abrams denied REBNY’s request for a preliminary injunction and dismissed most of its claims, allowing the law to take effect the next day. REBNY appealed to the Second Circuit, which heard oral argument on November 3, 2025. As of mid-2026, no decision has issued.1Bloomberg Law. REBNY v. City of New York, No. 24-CV-9678, Opinion and Order2The Real Deal. Judge Rejects REBNY’s Request for FARE Act Delay
What REBNY Asked the Court to Do
REBNY, the trade association representing more than 14,000 brokers, developers, and property managers, filed suit in late 2024 to stop Local Law 119 of 2024 before its June 11, 2025 effective date.3REBNY. The Real Estate Board of New York Represented by Hogan Lovells partner Sean Marotta, the organization raised three main arguments.
The first was a First Amendment claim. REBNY argued that restrictions on who could appear in rental listings and what fees could be advertised regulated commercial speech, and that the law’s disclosure requirements amounted to compelled speech by forcing brokers to convey information they would not otherwise include.4Courthouse News Service. FARE Act Second Circuit Appellant Brief
The second was a Contracts Clause claim. REBNY alleged the FARE Act impaired existing agreements between landlords and brokers by rendering certain fee arrangements unenforceable.5Courthouse News Service. FARE Act Second Circuit Appellee Brief
The third was state preemption. REBNY argued that New York’s Real Property Law already governs broker conduct and that the city law conflicted with those state-level rules.2The Real Deal. Judge Rejects REBNY’s Request for FARE Act Delay
REBNY sought a preliminary injunction that would have kept the law from taking effect while the case proceeded. Marotta argued the City Council could have drafted the legislation in a more “straightforward” manner to avoid what he called a constitutional defect.6New York Law Journal. Real Estate Group Urges Second Circuit to Block NYC’s Law Restricting Broker Fees
How Judge Abrams Ruled
Judge Abrams issued her decision on June 10, 2025, one day before the effective date. She denied the preliminary injunction and dismissed most of REBNY’s claims.1Bloomberg Law. REBNY v. City of New York, No. 24-CV-9678, Opinion and Order
On the First Amendment claim, the court found the listing restrictions were content-neutral, aimed at regulating the agency relationship between landlords and brokers rather than targeting the content of speech. Applying intermediate scrutiny under Central Hudson Gas & Electric Corp. v. Public Service Commission, Judge Abrams held the regulation was permissible because it served the legitimate purpose of aligning who pays for a service with who hired that service. She also rejected REBNY’s argument that the Council had acted out of hostility toward brokers, treating the Committee Report rather than individual legislators’ comments as the authoritative source of legislative intent.1Bloomberg Law. REBNY v. City of New York, No. 24-CV-9678, Opinion and Order
The state preemption claim was also dismissed. Governor Kathy Hochul’s administration filed an amicus brief affirming that state law does not conflict with the FARE Act, and Assemblymember Linda B. Rosenthal stated that “there is nothing in state law that requires tenants to cover the cost of their landlord’s real estate broker.”7Governor of New York. Governor Hochul Highlights Support for Ending Practice of Passing Brokers Fees to Tenants
The one claim the court left standing was the Contracts Clause argument. Even there, Judge Abrams found REBNY was unlikely to succeed, concluding the FARE Act serves a legitimate public purpose and is a reasonable means of achieving it.5Courthouse News Service. FARE Act Second Circuit Appellee Brief2The Real Deal. Judge Rejects REBNY’s Request for FARE Act Delay The city later argued that claim became moot because the only contract REBNY had identified as impaired was set to expire before the appeal could be heard.
The Appeal to the Second Circuit
REBNY filed a notice of appeal on June 12, 2025, two days after the district court’s ruling. It then returned to Judge Abrams asking for a fresh preliminary injunction to halt the law while the appeal was pending. On July 10, 2025, she rejected that request as well, writing that REBNY had “not demonstrated a strong likelihood of success on the merits of their appeal” and citing the harm caused when a city is “enjoined by a court from effectuating statutes enacted by representatives of its people.”2The Real Deal. Judge Rejects REBNY’s Request for FARE Act Delay
The Second Circuit agreed to expedite the case, and oral argument was heard on November 3, 2025. Marotta pressed the argument that the city’s restrictions did not match its stated goal of removing financial barriers for tenants. The Legal Aid Society filed an amicus brief on behalf of Neighbors Together Corp. in support of the city.8Legal Aid NYC. Real Estate Board of New York, Inc. v. City of New York – Amicus The appellate court has not yet ruled.
What the Law Requires While the Appeal Is Pending
Because the injunctions were denied, the FARE Act has been in effect since June 11, 2025. Its core rule is that the party who hires a broker pays the broker: landlords who engage a listing agent cannot shift that cost to the tenant. Before the law, broker fees in New York City typically ran 12 to 15 percent of a year’s rent, and nearly half of all leases carried a tenant-paid broker fee.9ABC7 New York. How the New FARE Act Will Impact Broker Fees in the NYC Rental Market
The law also requires landlords and their agents to provide tenants with an itemized, written disclosure of all fees before a lease is signed. Listings must display any charges a tenant will owe, and landlords cannot condition a rental on the tenant hiring a particular broker or using a dual agent. Tenants remain free to hire and pay their own broker if they choose. Violations carry civil penalties of up to $2,000 per offense, and tenants can sue privately to recover improperly charged fees.10NYC City Council. Int 0360-2024, Local Law 119 of 2024
StreetEasy estimated average upfront costs for signing a new lease would drop roughly 42 percent under the law, from about $12,942 to $7,537.9ABC7 New York. How the New FARE Act Will Impact Broker Fees in the NYC Rental Market Some landlords have raised rents to offset the cost of paying their own brokers; one told Curbed he increased a Clinton Hill apartment from $3,200 to $3,600 for that reason. StreetEasy found properties transitioning to no-fee models saw asking rents climb 5.3 percent annually as of April 2025, compared to 4.6 percent for listings still charging broker fees. StreetEasy senior economist Kenny Lee said those increases were far smaller than a full pass-through of a 12 percent broker fee, which would have pushed annual rent increases above 10 percent.11Curbed. FARE Act Law: Landlords Raise Rents, Fire Brokers
Enforcement Since the Ruling
The New York City Department of Consumer and Worker Protection (DCWP) is the primary enforcement agency, and complaints are adjudicated before the Office of Administrative Trials and Hearings. Tenants can report violations by calling 311 or through the DCWP’s website.12NYC.gov. FAQ – Broker Fees
By June 1, 2026, roughly one year after the law took effect, DCWP had received 2,033 complaints alleging FARE Act violations, though most were dismissed for insufficient evidence. The agency issued 74 summonses covering 100 alleged violations, resulting in $27,125 in penalties against 33 brokers. OATH ordered roughly $15,500 in illegally collected fees returned to 20 tenants. In one Crown Heights case, a broker was ordered to reimburse a tenant $4,480 and pay a $750 civil penalty.13Bushwick Daily. One Year After NYC Made Landlords Pay Broker Fees, the City Has Clawed Back $27,000 From 33 Brokers
Council Member Chi Ossé, who introduced the bill, has called for increased funding and staffing at DCWP to step up enforcement against brokers still charging tenants illegal fees.14The Chief Leader. City Still Working to Spread the Word on Broker Fee Ban Whether the enforcement regime continues depends on the Second Circuit, whose ruling on REBNY’s appeal is still pending.