The City Council has passed a bill requiring landlords to pay brokers directly, unless their prospective tenant hires a broker independently.

The Council passed the Fairness in Apartment Rentals Act, known as the FARE Act, with a veto-proof majority of 42 to 8 during a meeting at City Hall Wednesday.

Brokerage firms estimate that roughly half of the city's apartments require a tenant-paid brokers’ fee. While fees can vary, the standard is 15% of the annual rent.

The change will not mark the first time brokers’ fees have been regulated. In 2020, New York state issued a mandate requiring landlords to pay the fees, but the Real Estate Board of New York sued to overturn the requirement, and a state court ruled in the board’s favor.

Brooklyn City Councilmember Chi Ossé, who sponsored the bill, previously told NY1 he believes the legislation will result in more affordability for tenants.

"Today, the New York City Council proved it can put the interest of the people first and be an example of good governance. This is a win for our city and for healthy democracy," he said in a statement Wednesday.

The Real Estate Board of New York opposed the measure, claiming landlords footing the fees will result in much higher rents for tenants.

In a statement provided to NY1 Wednesday, REBNY president James Whelan called the vote "yet another instance of prioritizing ideology over economic and practical reality when it comes to the city's rental housing stock."

"The FARE Act will make it harder for tenants to find housing, raise rents, and make the hard work of real estate agents even more difficult," Whelan said. "REBNY will continue to pursue all options to fight against this harmful legislation on behalf of our members and the renters they serve."

In its own statement, the Legal Aid Society said the bill's passage marked "a welcomed step towards reforming New York City's long-standing system that has forced tenants to pay exorbitant broker fees that can cost as much as 20 percent of a year's rent."

"For our clients and all low-income New Yorkers, these fees often serve as financial barriers and limit tenant's housing options," the group added.