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Broker fees for renters are annoying—especially in a place like Massachusetts, where the cost to rent an apartment is already astronomical. If you’re a renter in the Bay State, here’s a bit of good news: Soon, broker fees will be outlawed—unless you’re the one who actually hires a broker.
Effective Aug. 1, this new law will make Massachusetts the last major state to adopt this rule. In a press release on Mass.gov, Gov. Maura Healey stated the main motives behind it:
“It saves renters thousands of dollars by eliminating broker’s fees, makes regional transit free, keeps community college cost-free, increases financial aid at state schools, makes it easier to find child care and protects free school meals.”
As with any legislation, this shift comes with benefits and downsides that are important to understand, regardless of whether you’re a renter or a landlord.
How Massachusetts and New York compare—similar ideas, different approaches
At first glance, the new broker law in Massachusetts sounds a lot like the Fairness in Apartment Rental Expenses (FARE) Act in New York, which bans mandatory broker fees for tenants. In reality, however, there are significant distinctions between the two laws.
In New York, landlords are now liable for the entire broker commission. According to critics, this may motivate them to increase rent prices in order to recoup the cost.
In Massachusetts, on the other hand, landlords or brokers will owe broker fees if they initiate the listing. Tenants will only be responsible for them if they actually hire an agent to help with their apartment search.
What renters need to know about negotiating broker fees in Mass.
If you’re a renter in Massachusetts who wants to be treated fairly (and potentially save some cash in the process), it’s a good idea to get up to speed with the current broker fee norms and negotiation tactics.
First off, the typical broker fee is one month’s rent, which on average is a whopping $3,243, according to Boston Agent Magazine. And in college towns like Cambridge and Medford, most renters use brokers to find off-campus housing—and may feel stuck paying fees.
After Aug. 1 rolls around, you could go ahead and flat out ask, “Who listed the unit?” and quickly determine who owes the broker fees. Remember, if you use an online resource like Realtor.com® to find an apartment on your own, you’re off the hook.
What landlords say—and what renters should watch for
At the end of the day, many landlords in Massachusetts are worried, especially smaller property owners who often rely on brokers to find tenants. If they have to drive up the cost of rent to offset broker commissions, there’s a good chance they’ll struggle.
Since everyone—including landlords want to make money, some may still attempt to sneak fees through leases. In a WBUR interview, Doug Quattrochi, executive director of MassLandlords, said the new law does nothing but explain who’s responsible for broker fees, and he wouldn’t be surprised if landlords simply act like it doesn’t exist.
“Ultimately, if there’s no enforcement, there’s not gonna be anything different happening, sorry to say. So, we’re kind of not expecting this will really change a whole lot. Some property owners may try to pass the cost along to renters in the form of higher rent,” explained Quattrochi.
As a renter, you should be mindful of this and read a lease agreement very carefully before you sign on the dotted line. If you notice any mysterious fees that don’t make sense, ask the landlord for clarity. Don’t be afraid to pass on the rental and continue your search.