NEW YORK – Mandatory broker fees, an unusual feature of apartment hunting in New York long vilified by tenantswill be banned under a law passed Wednesday after overcoming fierce backlash from the city’s real estate lobby.

In a system that exists in New York and almost nowhere else in the country, tenants are often forced to pay a real estate agent’s commission before moving into an apartment, even if that agent was hired by the landlord.

Fees are high, typically totaling up to 15 percent of the annual rent, or about $7,000 for an average-priced New York apartment.

Legislation passed by the City Council aims to prevent landlords from forcing these payments on tenants — at least as upfront fees. Although tenants can hire their own representatives, they will no longer be required to pay for brokers who only represent their landlords’ interests.

In a city where two-thirds of households are renters, the bill is very popular, a rare municipal piece of legislation championed by influencers on TikTok. This measure has also aroused opposition from brokers and their representatives, who warn that this measure could cause a shock wave in a sector which employs 25,000 agents.

“They spent hundreds of thousands of dollars to pressure our politicians to try to defeat this bill and force you to pay brokerage fees,” said Councilman Chi Ossé, a Democrat who sponsored the FARE Act, during a rally Wednesday. “But you know what we did: we beat them.”

New York’s broker fee arrangement dates back nearly a century, to a time when agents took an active role in placing newspaper ads and working directly with prospective tenants. The commission structure is also found in Boston, but in a few other parts of the country.

But with most listings now posted online and virtual or self-guided tours gaining popularity since the COVID-19 pandemic, many New Yorkers are growing increasingly frustrated with the fees.

At a City Council hearing this summer, several speakers recalled paying thousands of dollars to a broker who seemed to do nothing more than open a door or text them the code to a safe -strong.

“In most businesses, the person who hires the person pays them,” Agustina Velez, a Queens housekeeper, said at that hearing. She remembers paying $6,000 to change apartments. “Enough with these injustices. Owners must pay for the services they use.

Brokers counter that they do much more than just keep doors open: conducting background checks, juggling showings and streamlining communication with landlords in a city where many tenants never meet their building owners.

“This is the beginning of a hierarchical, government-controlled housing system,” said Jordan Silver, a broker with Brown Harris Stevens. “The language is so incredibly vague that we have no idea what it would look like in the world.”

Other opponents of the bill, including the Real Estate Board of New York, say landlords will roll the extra costs into monthly rents.

But some New Yorkers say that would be preferable to the current system of high upfront costs that make moving difficult.

“From the perspective of a tech investor and business owner in New York, the more we can do to make it cheaper and easier for talented young people to come here and stay, the better off we will be,” entrepreneur and bill supporter Bradley Tusk said in a statement. “Anyone who has paid 15% of their annual rent in broker fees for someone to let you into an apartment for 10 minutes knows that this practice is nothing more than legalized theft. »

Mayor Eric Adams, himself a former real estate broker, raised concerns about the legislation and its possible unintended consequences.

“Sometimes our ideas are not fleshed out enough to understand what the long-term consequences are,” he said this week, adding that he would work to “find common ground.”

But he will have limited decision-making power to do so: the bill was adopted by 42 votes to 8, a veto-proof margin. It takes effect in six months.