The bill to end forced broker fees finally became law last week (no thanks to Eric Adams, who declined to sign it). And as expected, the Real Estate Board of New York sued. On Monday, the real-estate interest group filed a suit arguing — interestingly enough! — that the FARE Act violates brokers’ First Amendment rights.
How? Per their claim, the law infringes on commercial free speech because it makes it “illegal for brokers to ‘publish’ an apartment listing and then seek to receive compensation from a tenant,” thus inhibiting brokers from “advertising open listings” — an arrangement where multiple agents post a listing to bring potential tenants to a landlord, even though they weren’t explicitly hired by that landlord. (This kind of thing often means the tenant pays the fee.) The suit also claims the law violates the Contracts Clause in the Constitution by voiding certain contracts that involve tenant-pays fee agreements and that it’s preempted by state law. Finally, the suit claims, it will make everyone feel bad! “The net effect of the FARE Act will not only be angry brokers and landlords, but, most of all, angry consumers.”
