During your search for an apartment in New York City, you’ve likely come across mentions of no- fee apartments. Apartment renting in New York is unique, and this is just one of many nuances of the rental process. The fees surrounding apartments may be confusing at first, but it’s simple once you understand them.
What is a fee?
When you rent an apartment there’s a fee. Simply put, it’s an amount paid to the broker. This is how brokers earn a living. A landlord hires a broker to help rent an apartment quickly, and in return the broker makes a percentage of the monthly rent.
Every month the apartment sits vacant is lost income for the owner. Paying a broker to rent the apartment is often cheaper than allowing it to be without tenants. The fee is either paid by the landlord or by you.
Some apartments are listed as no-fee apartments. The important thing to know is that the name says it all. You won’t be responsible for paying the broker’s fee.
An apartment may have no fee because the broker’s fee is being paid by the landlord. So, the landlord may offer the apartment at a slightly higher price in order to cover the broker’s cost. In this case, the fee may be partially built in to the rent.
The other possibility is that the landlord is listing the apartment himself. Apartment renting does not always involve a broker. If a broker is not hired to lease the unit, there shouldn’t be any broker’s fees.
When are fees paid?
Fees are generally due upon completion of the lease agreement. If you rent an apartment with fees, you’ll be responsible for paying the broker. If you rent a no-fee apartment, the broker is in charge of handling the fees with the landlord. Remember that an apartment without fees may have a higher monthly rent, so don’t limit yourself to no-fee apartments in your search for a new home.