Judge Rejects REBNY’s Request for FARE Act Delay

11 July 2025

A federal judge this week denied another attempt by the Real Estate Board of New York to halt New York City’s new broker fee law.

Judge Ronnie Abrams on Thursday rejected another request by the trade group seeking a preliminary injunction to halt the Fairness in Apartment Rental Expenses Act, or FARE Act. The law, which went into effect last month, requires landlords to pay commission for rental brokers they hire.

In a June 10 order, Abrams denied REBNY’s initial request to prevent the FARE Act from going into effect and dismissed the group’s claims that the measure violated the First Amendment and was preempted by state law. Two days later, REBNY filed a notice of appeal that it is appealing that decision with the U.S. Court of Appeals for the Second Circuit.

It also fired off another motion for a preliminary injunction, requesting a reprieve from the law while its appeal is pending. In its motion, REBNY warned that every day the law remains in effect “imposes further irreparable harm” and “further destabilizes the New York City rental market.”

Abrams wrote in her June opinion that REBNY failed to show that the group’s lawsuit was likely to succeed. In Thursday’s order, she said REBNY has “not demonstrated a strong likelihood of success on the merits of their appeal” either. She noted that because of REBNY’s chances of succeeding, combined with the harm that is done when a city is “enjoined by a court from effectuating statutes enacted by representatives of its people,” its latest request for a preliminary injunction should also be rejected.

The judge’s latest decision was not surprising, given her June order. REBNY indicated that the Second Circuit has agreed to expedite its appeal.

Crain’s first reported the judge’s Thursday order.

The City Council approved the FARE Act in November. REBNY argued that the law would drive up rents as landlords shifted broker costs back to tenants. Typically, tenants must pay broker fees, which in many cases can amount to 15 percent of the first year’s rent. Proponents of the law have said broker fees created enormous upfront costs for renters and eroded tenants’ leverage in negotiating with their landlords over rent increases. In such talks, landlords know that a renter’s alternative to a rent hike is moving and shelling out thousands of dollars in broker fees.

A month after the law was approved, the trade group filed a lawsuit alleging that it violates the First Amendment because it discourages the publishing of rental listings. Under the FARE Act, a broker who advertises a rental is assumed to have been hired by the landlord. The lawsuit also claimed that the law was preempted by state law and wrongfully interfered with private contracts. The latter allegation was the only claim that Abrams left intact in her June order.