CRE Mulls How Potential Rental Commission Ban Could Shake Up The Industry

Despite a temporary reprieve on a major change to how rental commissions are collected in the city, a chaotic two weeks has forced real estate brokers to consider how their businesses will be run in the future. Earlier this month, state regulators caught the city by surprise, saying renters could no longer be charged a broker fee, unless they specifically hired a broker themselves. It is common practice in New York City for tenants to pay as much as 15% of the annual rent to a broker, even if that broker is representing the landlord. Confusion — and fury — ensued, with many real estate professionals vowing to fight the change. Last Monday, a New York judge issued a temporary restraining order after industry members filed an Article 78 petition, meaning the status quo remains, for a few weeks at least. But despite the temporary freeze, real estate players are looking at how this possible change could reshape the multifamily market in the city.