A prominent real estate association has filed a lawsuit against New York City over a new law mandating that landlords pay broker fees.
The Real Estate Board of New York (REBNY) and other affiliated groups initiated the legal action on Monday in a federal court in Manhattan, arguing that the law will “wreak havoc on the New York City rental markets and unleash a host of unintended consequences.”
The New York City Council passed the controversial measure last month, requiring landlords to cover the costs of hiring brokers rather than shifting these expenses onto tenants. This practice, which had been a longstanding feature of the city’s rental system, added an extra financial burden for renters when moving into new apartments.
According to the Real Estate Board, the legislation infringes upon their First Amendment rights, as it hampers their ability to advertise “open listing” apartments. They further contend that the law breaches the contracts clause of the U.S. Constitution.
A spokesperson for the city’s Law Department, Nicholas Paolucci, responded by stating that the department would “review the case once served and respond accordingly.” Meanwhile, City Council member Chi Ossé, who introduced the bill, described the measure as a “crucial step” toward improving fairness for the city’s working-class residents. He added that the lawsuit is an effort to suppress the voices of New York’s residents.
Carl Hum, REBNY’s general counsel and senior vice president, criticized the law as “bad policy” that would likely drive up rents and complicate the process for tenants to secure housing.
“We look forward to our day in court,” Hum remarked in a statement.
In 2020, REBNY successfully overturned a previous attempt by the city to regulate how broker fees were paid.
{Matzav.com}