Massachusetts’ New Law on Broker Fees: What Landlords Need to Know Massachusetts’ New Law on Broker Fees: What Landlords Need to Know
On August 1, 2025, Massachusetts implemented a major change to rental practices: landlords can no longer require tenants to pay broker fees for services provided to the landlord. This reform, part of the Fiscal Year 2026 state budget, aims to reduce upfront costs for renters and increase transparency in the housing market. For landlords, understanding this law is critical to avoid legal risks and maintain compliance.
What Is a Broker’s Fee?
A broker’s fee—sometimes called a leasing fee or finder’s fee—is a payment made to a real estate broker for services such as marketing a rental unit, screening tenants, and facilitating lease agreements. Traditionally, in Massachusetts, tenants often paid this fee even when the broker was hired by the landlord . These fees typically equal one month’s rent, adding thousands of dollars to a tenant’s upfront costs.
What Is the New Law on Tenant-Paid Broker’s Fees in Massachusetts?
Under the new law, the party who hires the broker must pay the broker’s fee. If you, as a landlord, engage a broker to list your property, you are responsible for paying that fee. Tenants only pay broker fees if they hire a broker to represent them in finding housing. This law does not ban broker fees entirely, but it eliminates the practice of shifting landlord-hired broker costs onto tenants.
Key Points:
- Effective August 1, 2025.
- Ads stating “tenant to pay broker fee” must be removed.
- Violations can lead to triple damages plus attorney’s fees under Massachusetts Consumer Protection Law (Chapter 93A).
H2: What Does the New Law Mean for Landlords?
For landlords, this change requires immediate compliance adjustments:
1. Update Your Listings and Lease Documents
Remove any language requiring tenants to pay broker fees and ensure your marketing materials reflect the new rule.
2. Revise Broker Agreements
Confirm that contracts with brokers specify landlord will pay the commission. Dual representation—where a broker collects fees from both landlord and tenant—is prohibited
3. Train Your Team
Educate property managers and leasing agents about the new law to avoid inadvertent violations.
Ultimately, this new law means that landlords should adjust their expectations as to what payments they can expect from new tenants. Unless a new tenant has contracted a broker themselves, tenants should not be paying the broker’s fees, and landlords can no longer collect their costs from tenants for landlord’s own broker. However, landlords can still expect to collect first month’s rent, last month’s rent, and a security deposit from tenants.
What Does the New Law Mean for Tenants?
Tenants will no longer face mandatory broker fees when renting a unit listed by a landlord’s broker. This reduces upfront costs.
However, tenants who hire their own broker will still pay that broker’s fee.
Why Was This Law Passed?
Massachusetts was one of the last major markets allowing tenant-paid broker fees. Advocates argued these fees created a significant barrier to housing, especially for low-income families. The new law promotes equity and affordability, ensuring renters only pay for services they request.
Compliance Tips for Landlords
- Audit your listings: Remove “tenant pays broker fee” language.
- Update lease templates: Reflect the new payment structure.
- Document broker engagements: Keep clear records of who hired the broker.
- Communicate proactively: Inform prospective tenants about the change to build trust.
Potential Risks for Noncompliance
Landlords who violate this law risk:
- Consumer protection claims under Chapter 93A.
- Triple damages and attorney’s fees.
- Complaints to the Attorney General, which could lead to fines and reputational harm.
Will Rents Increase?
Industry experts predict some landlords may raise rents to offset broker costs. While this is legal, excessive increases could reduce competitiveness and attract scrutiny. In similar cases, such as New York’s FARE Act, rents initially spiked but stabilized over time.
Bottom Line for Landlords
This law doesn’t eliminate broker fees—it reallocates responsibility. If you hire a broker, you pay the fee. To stay compliant:
- Review your practices now.
- Update agreements and marketing materials.
- Train your staff.
- Consider strategic pricing adjustments.
By adapting early, you can avoid legal pitfalls and maintain strong tenant relationships in a changing rental market.
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