NYC Poised to Apply Restrictions on Brokerage Fees

The proposed legislation would cap the commission on a rental transaction to a maximum fee of one month’s rent.

Downtown Manhattan | Credit Unsplash

(NEW YORK, NY) — A new law poised to limit real estate brokers’ commissions on real estate transaction has been strongly opposed by a group of real estate agents in the city.

The proposed legislation would cap the commission on a rental transaction to a maximum fee of one month’s rent. Real estate agents, according to a Change.org petition launched last month, will be collecting roughly half of what they can currently earn on the same transaction, and will no longer be able to earn a full commission.

“The past decade has not been kind to the traditional rental agent. The use of the internet by landlords and consumers has changed the industry considerably. Should this legislation pass and fees are capped, this sector of the industry will be crippled beyond repair,” said Jonathan Greenspan, president of On-Line Residential (OLR), an online multiple listing service for brokers.

“I cannot think of a single reason why the local government should have their hands deep into the pockets of the real estate agent.”

The idea behind this type of legislation, Greenspan says, “is just terribly flawed.”

“Real Estate brokerage is a tough industry. Many people toil as rental agents for years before they make a decent income. It is not easy. It’s a 24/7 job with no guarantee of success. You are not compensated for the hours your work, only for the deals that you conclude. There is little or no consumer loyalty. It’s a business based on handshakes, hard work, and hope.”

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