Massachusetts Bans Broker Fees for Renters

News Summary

The Massachusetts Legislature has passed a law prohibiting landlords from charging tenants broker fees, a significant step aimed at alleviating financial burdens for renters. Set to take effect on August 1, the law shifts the responsibility of broker fees to the party that first engages the broker, typically the landlord. This change, supported by tenant advocacy groups, seeks to provide financial relief amidst rising rental costs and accommodate housing affordability concerns within the state.

Boston, Massachusetts – In a significant move aimed at alleviating the financial burdens faced by renters, the Massachusetts Legislature has passed a measure that prohibits landlords from requiring tenants to pay broker fees. This new legislation is set to come into effect on August 1, following an announcement from Governor Maura Healey, who plans to sign the measure into law shortly.

This legislation, which is part of the state budget, does not eliminate broker fees entirely. Instead, it mandates that the fees must be paid by whichever party first engages the broker, typically either the landlord or the tenant. Broker fees have traditionally amounted to one month’s rent and have become a significant financial barrier for many renters, making it difficult for them to afford moving costs that often total over $10,000.

The proposal has received strong backing from tenant advocacy organizations, including Homes for All Massachusetts. Advocacy leaders have characterized the policy as a necessary reform long overdue for renters in the state, who have felt the strain of high rental costs and associated fees.

Historically, Massachusetts has stood out for its practice of imposing tenant-paid broker fees, a norm that has placed an undue burden on renters, particularly in high-demand areas like Boston. The issue has been highlighted due to the recent outlawing of similar practices in New York City, which may have contributed to the momentum behind this new legislation in Massachusetts.

Several cities within the state, including Cambridge and Salem, have already initiated local legislation to abolish broker fees, reflecting growing concern over housing affordability and tenant rights.

State Senator Lydia Edwards pointed out that by shifting the responsibility of paying broker fees from tenants to landlords, the new law will provide immediate financial relief for renters, effectively putting more money back in their pockets. However, with such an impactful change, there are concerns regarding how the enforcement and logistics of the measure will unfold. An educational campaign will be necessary to ensure tenants are aware of their new rights under this law.

The measure has also attracted endorsements from various online real estate platforms, such as Zillow, which argue that brokers should be compensated by the party that hires them, rather than placing that financial burden on tenants. However, the legislation is not without its critics. Local brokers have raised alarms that requiring landlords to cover these fees may lead to increased rents as landlords adjust to absorb the added costs.

Concerns have also been articulated by industry leaders, including Demetrios Salpoglou, CEO of a real estate listing website, who fears that a shift in broker fee responsibility could exacerbate existing affordability issues in the housing market. While tenant advocates acknowledge that this legislative change provides considerable immediate relief, they warn that it should be viewed as a preliminary step towards more comprehensive housing reform focused on long-term affordability and tenant protections.

Governor Healey has underscored the need for reform in light of the high cost of living in Massachusetts, which she notes often adds unnecessary financial strain to renters already facing steep housing prices. The recent legislative change seeks to mitigate some of those pressures while emphasizing the importance of supporting renters in a challenging market.

As Massachusetts prepares to implement this measure, the focus will now shift to the practical implications of the new law and how it may reshape the rental market dynamics across the state.

Deeper Dive: News & Info About This Topic

HERE Resources

Landlord Faces Financial Crisis After Tenants Exploit Legal Loopholes
Boston’s Office Market Faces Challenges Amid New Developments
Boston Moves Towards Elimination of Broker Fees for Renters
Boston Residents May Soon Breathe Easier with Proposed Change to Broker Fees

Additional Resources

• Boston Globe
• NBC Boston
• Boston.com
• CBS News
• WCVB
• Wikipedia: Broker fee
• Google Search: Massachusetts broker fees
• Google Scholar: broker fees Massachusetts
• Encyclopedia Britannica: broker fees
• Google News: Massachusetts broker fees