Recent law eliminates rental broker fees in Boston, offering some relief to tenants Massachusetts Legal Assistance Corporation

Each state’s representation agreement is approved by the state’s real estate governing board, association, or Multiple Listing Service. If you are hired by a tenant, that tenant is responsible for your fee. Charging a tenant or landlord who did not hire you is prohibited under the new law.

Breaking Down Broker Fees and Commission Structures

Massachusetts was the last state in the country to create a law preventing landlords from forcing tenants to pay broker fees. New York’s Fairness in Apartment Rental Expenses (FARE) Act took effect earlier this year, and while some critics cite higher rent as a symptom of the law, experts say it does more good than harm. Landlords can adjust rents on new leases to cover broker fees, but cannot retroactively charge tenants. Always consult a real estate attorney in New York to stay compliant. While brokers can find listings for prospective renters, many tenants end up finding listings on their own using real estate sites.

What Should I Do With My Money?

• This does not mean that being a landlord is especially affordable, though, and it could get more expensive with new changes to the rules about broker fees.
• Beginning August 1, 2025, only the person who hires a broker or salesperson is allowed to pay that broker’s fee.
• New York City has yet to see substantial rent increases since the FARE Act was enacted last month.
• In hot markets, however, the cost is more likely to be borne by buyers.
• If you are hired by a tenant, that tenant is responsible for your fee.
• It’s still early, but brokers say a lot depends on how competitive the market is and who has the leverage.

As a business we don’t give stock tips, and have not authorized anyone to trade on behalf of others. If you find anyone claiming to be part of Zerodha and offering such services, please create a ticket here. Currently, the national average real estate agent commission is 5.57 percent total, according to September 2025 data from Clever Real Estate. The average split is 2.82 percent to iqcent review the listing agent (representing the seller) and 2.75 percent to the buyer’s agent.

Need Help Understanding the 2025 Broker Fee Law?

You must work only on behalf of the party that hired you and that will pay you. Northeastern University experts say that while this is helpful in reducing the upfront costs of moving, it’s not the answer to reducing the costs of housing in these expensive cities. It could actually have the opposite effect and cause monthly rents to rise as landlords find other ways to make tenants pay that cost. “36% of homebuyers and sellers don’t know they can negotiate real estate agent fees. Here’s how to do it.” CNBC.

A commission is a percentage fee on the sale price of your business. This fee is negotiated before you list with a broker and it’s paid at closing. This legislation, outlined in a budget bill, eliminates a steep cost for tenants and a major barrier to finding a place to live. Renters still have to pay initial fees, but unless they hire a broker themselves, tenants are free from this unnecessary cost. But it’s a lot of work, much of it complicated, and the stakes are high. So weigh the pros and cons of going without professional representation carefully.

Brokers and salespersons may advertise their services to you, but landlords or their agents can’t condition the rental of an apartment on you paying a particular broker or salesperson they hired. As of August 1, 2025, broker’s fees for rental units must be paid by the person who hired the broker or salesperson. If you didn’t hire a broker or salesperson, you shouldn’t be paying their fee.

All you need to know about the broker fee for your next rental

Sellers, at least theoretically, are the ones who really stand to benefit from the new rules. As Leo Pareja, the CEO of eXp Realty points out, the terms of these changes were worked out by sellers’ attorneys who filed class-action lawsuits against the NAR and individual brokerages. Landlords, however, will now absorb costs they previously passed to tenants. For owners with multiple New York City rentals, this means rethinking rental strategies and budgeting.

ZERO commissions

Be sure your contract spells out who is paying, and how much, very clearly. The settlement could lead to more substantial changes to business models and agent commissions going forward. In particular, new provisions could mitigate the issues of steering and collusion, by prohibiting sellers’ agents from advertising rates to buyers’ agents through an MLS. That said, press reports suggest that sellers’ agents have found ways of sharing information on commission rate offers outside of the MLS.

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A landlord cannot add their broker’s or salesperson’s fee as a requirement for a tenant to sign a lease. Landlords can require tenants to work with their broker or salesperson so long as the landlord is paying for their fee. But landlords cannot require tenants to pay the landlord’s hired broker or salesperson themselves prior to renting a unit. “If we never banned broker fees in Massachusetts, for the vast, vast majority of renters, their rent was going up next month anyway,” said Martinez.

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However, buyers of apartments to buy NYC should still review all terms carefully with a real estate attorney before signing. Changes to the way commissions work went into effect in 2024 as a result of a lawsuit settled by the National Association of Realtors (NAR) and several major brokerages. The longstanding commission model of sellers footing the bill for both their own agent and their buyer’s, typically totaling 5 to 6 percent of the home’s sale price, is no longer in effect. Now, which party pays for which commission is negotiated upfront, and sellers may or may not agree to pay their buyer’s agent’s fee.

Demat AMC (Annual Maintenance Charge)

These numbers might change in the case of dual agency, when a single agent represents both the buyer and seller in a transaction. Buyers working directly with a listing agent may have more room for commission negotiation, because the agent will be earning a fee from both parties. Laws about this vary by state; in some states, dual agency is not permitted. For years, the typical going rate was 6 percent in total, usually split down the middle between the buyer’s agent and seller’s agent. But it began to fluctuate with the advent of discount brokers and the rise of online, publicly accessible listings. We also observe that areas with lower average commission rates tend to have more variation in rates, suggesting that when the 3 percent norm breaks down in a given area, the new norm (for example, 2.5 percent) is not quite as strong.

What if the landlord says I still must pay the broker’s fee?

Only a very small portion of real estate agents work on salary — working on commission, for a percentage of the home’s final sale price, is much more common. That means the more expensive the home, the more money the agents make. Business brokers do far more than facilitate transactions—they serve as strategic partners who optimize outcomes for sellers. Their fees represent an investment in expertise, access, and streamlined processes, ensuring sellers maximize their business’s value while minimizing risks and inefficiencies.