NYC tenants shocked by exorbitant broker fees, including $15K to secure $1,100 rent-stabilized Queens apartment
The rent’s too damn high in New York — but the broker fees are really murder.
City dwellers wanting to score a place to live at a reasonable price are finding that out the hard way — as they are being socked with outrageous fees of up to $20,000 just to be able to rent an apartment.
One home shopper claims he almost lost it when a broker tried to soak him for a $15,000 fee for a $1,100, rent-controlled apartment in a run-down brick building in Flushing recently.
“I never replied because not in a million years would I ever do that,” Christian Garbutt, 27, told The Post Thursday.
Despite the flabbergasting fee, someone eventually rented the unit on Ash Avenue, according to Gothamist.
But when called by the outlet for comment the realtor, Keller Williams said they would be giving some of the money back, they said.
“This broker’s fee goes for nothing, it goes to [the broker’s] pocket,” Garbutt said.
“He’s gonna take advantage of all these people.”
The broker fee situation has gotten so bad that Gov. Kathy Hochul slammed the prices as “excessive” and “unfair” when she announced fines on one last month for overcharging clients.
The broker, who worked with City Wide Apartments, was ordered to pay $260,000 in penalties and restitution for forcing a tenant to fork over a nearly $20,000 fee to secure a rent-stabilized apartment on the Upper West Side.
The sky-high fees are possibly a symptom of 2019 policy changes that made it harder for landlords to hike up the rent prices — leaving them to keep units off the market because they can never recoup the renovation costs under the low rents, Emily Ackerman, a veteran real estate agent with Compass, told The Post.
As a result, brokers with under-market listings like the one that Garbutt replied to “are flooded with calls.”
“People will pay a really high premium to lock that [rent-stable apartment] in – somebody will pay!” Ackerman said, calling the practice “disgusting.”
Garbutt described himself as being in a similar situation when he first reached out to broker Miguel Angel Silva about a unit in a Flushing building just a few blocks from the neighborhood’s famous downtown area filled with a plethora of world-class Chinese eateries.
He initially looked at a $1,450-a-month one-bedroom, but was shocked to find out it had a $8,000 broker fee, which was 45 percent of his yearly rent — which is much higher than the typical 15 percent fee.
He balked at the price.
“I was like, this is gonna clear all my savings,” he said, noting that he only barely enough saved up in the first place thanks to a recent bonus at work.
Garbutt, however, reached out to Silva again few days later about another one-bedroom in the building when he noticed its price was just $1,100 per month.
But Garbutt’s hopes were dashed when Silva told him that the second unit had a $15,000 broker fee.
The average one-bedroom in Queens goes for about $2,320 a month, according to Apartments.com.
Even when saving $1,220 per month in the stabilized unit, it would take over 12 months to accumulate $15,000.
“[Silva] doesn’t put [the fee] on the listing, he wants them to see [the apartment] and fall in love first,” Garbutt fumed. “He’s taking advantage [of people.]”
Residents in the building, which smelled of smoke and featured dim lights and noticiable cobwebs around the halls, said that because of rent stablization, some who have been there for years are paying as little as $700.
One name Peter was surprised to hear that a broker tried to charge $15,000 to live there.
“I don’t know if anyone’s actually giving them $15,000,” he said.
A 21-year-old woman who declined to give her name said she just moved there and got at $1,585-a-month studio though Silva — but he only charged her a $1,700 fee.
“It’s rent stabilized. It’s a good apartment. I mean, I was looking since March,” she said.
Neither Keller Williams nor Silva replied to The Post’s request for a comment.
There is no official cap on broker’s fees in New York, but the court can determine if a tenant has been charged “exorbitant” amounts on a case-by-case basis.
Suzanne Adler, another Compass agent with experience as a housing advocate, suggested that the exorbitant fees are “a new way to keep many people excluded” from the market.
“Thankfully, gone are the days when landlords can brazenly instruct agents not to rent to [housing voucher] holders. Agents and landlords can get in a lot of trouble and incur huge fines,” she explained.
“So unethical agents like that guy…probably felt he had to get creative to exclude a certain kind of tenant.”
Meanwhile, Garbutt – who is not a housing voucher holder is still looking for a place to live: He is considering a co-op, but is still deciding, he told The Post.
“I want people to hear this, I don’t think it’s okay,” he said of his experience.
