For renters, a rare relief as the State House moves to end broker fees
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The rule, which lawmakers included in the state budget they sent to Governor Maura Healey on Monday, will stop short of outright banning
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'This policy is a long-overdue win for tenants, especially those who move frequently,' said Carolyn Chou, executive director of the renter advocacy group Homes for All Massachusetts. 'It's a common-sense step to ensure that renters are not forced to pay unnecessary costs to rent an apartment, and to reduce the steep cost of moving to a new home.'
Tenant-paid broker fees have been around in Boston for decades. While there is no rule on the books that requires renters pay the fees, high rental demand gives landlords the upper hand, and they usually pass the fee on to tenants. And combined with the typical security deposit and first and last month's rent, the fee contributes to combined move-in costs that can easily reach five figures.
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Angst about the fees has grown in recent years, especially as online listing services have demystified apartment hunting. Even when renters do most of the legwork of an apartment search online, they're usually forced to interact with a broker to set up a tour, or even just to sign a lease, and find themselves charged for the service.
In New York, the other major city where broker fees were prominent, the City Council
New York's move helped spark the change here. Since its measure passed, several cities and towns, including Cambridge, Salem, and Amherst,
Governor Maura Healey signaled support for a law requiring rental brokers' fees to be paid by the party that first engages the broker, rather than automatically being passed on to tenants, as is often the case in Greater Boston.
Matthew J. Lee/Globe Staff
State Senator Lydia Edwards, who previously co-chaired the Legislature's Joint Committee on Housing, said Healey's support was a jolt of momentum that helped get legislators on board. While there was some pushback to the idea of ending fees entirely, she said, most lawmakers could not oppose the idea of shifting them to landlords.
'This is a housing policy that has an immediate impact and puts money in people's pockets,' Edwards said. 'Usually, when we debate housing policy, it's difficult to quantify the impact of what we're talking about. This is something that has an immediate, obvious impact.'
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Should Healey approve the proposal, questions about enforcement and logistics remain.
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The state, cities, and towns will need to implement an education campaign to ensure tenants know they do not have to pay the fee, Edwards said, in case landlords still attempt to charge them.
The proposal has earned broad support from renters and their advocates, and from real estate website Zillow, which sent a letter to Healey this week urging her to sign off on the policy, citing Boston's exorbitant rents. The company also argued that brokers should be compensated by the party that hires them.
'Agents should be compensated for their valuable services, but that compensation should come from the party who hired them,' wrote Lorraine Collins, Zillow's government relations and public affairs manager for the northeast. 'If a tenant needs to engage the services of an agent to assist with their rental housing search, they can still do so; however, they should not be forced to work with and pay an agent hired by the landlord.'
Broker fees support
Those brokers say their work is valuable, and that they often help tenants find the best apartments and a good deal. They have pushed back on the change, arguing that if landlords are forced to pay their fee, they'll simply pass it along to tenants in the form of increased rent.
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'Is the goal here to punish real estate brokers, or punish good tax-paying landlords?' said Demetrios Salpoglou, chief executive of the local real estate listing website Boston Pads, who also owns several brokerages. 'Because I don't see how this makes renting an apartment in Boston more affordable. If anything, it's going to drive up costs.'
Still, advocates argue that, even if the cost of the fee is passed along as rent, it will still reduce move-in costs, which can be a significant burden.
And while the policy will provide some relief, tenant advocates said it should only be viewed as a starting point for more comprehensive moves to help tenants afford rental costs.
'Broker fee reform won't do much to help you if you're pushed out of your apartment by an excessive rent hike so your landlord can flip the property and turn your unit into high-end housing,' said Chou.
Andrew Brinker can be reached at
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