Massachusetts Plan Would Make Property Owners Pay Rental Broker Fees Instead of Tenants
A new plan from Massachusetts Governor Maura Healey looks to shift rental broker fees from tenants to property owners. The switch would cut down the money needed to start a lease across the state.
“Broker fees are an unfair cost for renters, and they should not be on the hook to pay for someone they didn’t hire,” said Healey to WCVB.
Moving expenses are steep in Massachusetts. Renters need to come up with about $10,000 before getting keys – including first and last month’s rent, a security deposit, plus broker fees. With basic one-bedroom apartments costing $2,500 monthly, the upfront cost stops many potential renters.
Senate President Karen Spilka supports the plan, which follows New York City’s 2020 ban on tenant-paid broker fees.
Market experts expect big changes. “It’s a supply and demand issue,” says Boston Pads CEO Demetrios Salpoglou. “If we zero in on boosting available units through serious talks, that’s when prices will start dropping.”
The state’s real estate groups strongly oppose any changes. They’ve always fought back when anyone tries to limit broker fees for renters.
New business models have popped up. Places for Less charges flat fees to owners instead of percentage-based commissions.
Since 2021, Northampton leaders have considered similar rules. Research by the city’s Housing Partnership shows broker fees keep people from finding affordable homes.
The current fee setup puts a strain on renters. Many say these extra costs make finding housing almost impossible.
