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A controversial move sparked a flurry of conversation earlier this month, as New York State announced it was eliminating the fees brokerages charge tenants in exchange for finding them a rental.

However, the order has been temporarily suspended following complaints and a lawsuit against the Department of State, issued by several real estate groups, including the Real Estate Board of New York (REBNY) and the New York State Association of REALTORS® (NYSAR), who allege that New York State provided insufficient warning and engaged in improper rulemaking. REBNY President James Whelan and NYSAR President Jennifer Stevenson released the following joint statement:

“The entry today [at press time] by the Court in Albany of an order temporarily halting the implementation of New York State Department of State’s (DOS) interpretation of the Statewide Housing Stability and Tenant Protection Act means that thousands of hardworking, honest real estate agents across New York State can do business in the same way they did prior to last week’s DOS memo without fear of discipline by the DOS.  We look forward to ultimately resolving this matter in Court in the weeks ahead. Meanwhile, we appreciate all of our members’ support and vigilance during this period of upheaval and confusion. We also want to thank Claude Szyfer and his team at Stroock & Stroock & Lavan LLP for their tireless efforts on this matter.”

Due to the temporary restraining order, issued by Justice Michael Mackey of the New York Supreme Court on Monday, Feb. 10, New York brokerages can continue collecting commissions from tenants for rentals—a decision that is expected to hold until at least March 13, according to the New York Times.

If the commission ban is eventually enacted, how could the decision influence the New York rental markets? Although tenants would be off-limits, brokerages would still be able to charge landlords for services—a move that concerns brokers, who believe landlords would then increase residents’ rent burden to make up the cost.

Two New York City brokerage leaders, Jared Antin, director of Sales at Elegran, and Eric Benaim, CEO of Modern Spaces, shared their insights on what the ban would mean.

“This presents an opportunity for the real estate industry to re-communicate its value prospective to tenants, and the value a tenant would receive from using a broker,” said Antin. “Many consumers believe that agents simply open the doors to apartments; however, that is just a small part of an agent’s job in navigating a home shopper through the process. An agent is there to make the process smooth by leveraging their knowledge of the market and, most importantly, removing emotion and friction from the process. When someone is moving, their life is in transition—it is very stressful, and an agent needs to be able to help their clients keep their emotions in check to ensure a deal moves forward smoothly.”

“Mom-and-pop landlords who own 3-8 family homes would be impacted the most from the new regulations,” said Benaim. “Many of these landlords are immigrants or senior citizens who have saved and relied on this income to survive. They are the ones who would suffer, as most larger landlords at new rental developments already expect to pay broker fees. Because of this, mom-and-pop landlords would likely need to raise monthly rates to combat the loss of income.”

Stay tuned to RISMedia for more developments.

Liz Dominguez is RISMedia’s senior editor. Email her your real estate news ideas at