It has been customary practice throughout Massachusetts for landlords who use real estate broker services to require a prospective tenant to pay what is essentially the landlord’s broker fee to the broker, upon accepting an apartment for rent, prior to the commencement of the tenancy.
This practice is no longer legal in Massachusetts as of August 1, 2025. The new law requires the broker fee be paid by the individual or entity to whom the broker’s services were provided, generally this is the landlord or property management company who hired the broker to find a tenant and lease the apartment to the tenant. The new law also prohibits landlords from adding the broker’s fee to the stated rent or characterizing the broker’s fee as some other charge or fee.
A “broker fee” in this context, is a fee paid to a broker/real estate agent as compensation for listing an apartment for lease and finding a suitable tenant on landlord’s behalf.
Landlords were already prohibited from requiring tenants to pay any amount at or prior to the start of a tenancy other than the first month’s rent, last month’s rent, a security deposit, and the actual cost of changing a lock for the tenants pursuant to G.L. c. 186, § 15B. But landlords continued to work around the statute by requiring the tenant to pay the broker’s fee directly to the broker and not the landlord, thereby circumventing the spirit of the law.
Now, a tenant may only pay a broker fee where the tenant engages the services of the broker, the broker assists in finding residential property for the tenant, presents an offer to lease to a landlord, negotiates on tenant’s behalf, and faithfully represents tenant interests.
The new law explicitly prohibits real estate professionals from charging fees to tenants when they primarily provide services to a landlord. Failure to comply with the law by a landlord is considered a violation of the security deposit statute, G.L. c. 186, § 15B and opens landlord up to potential liability under the Consumer Protection Act for unfair and deceptive business practices under G.L. c. 93A.
The reality of this newly implemented law will likely cause landlords who rely heavily on the services of brokers to raise their monthly rental premiums over time to make up for this added expense. However, implementation of the new law should lower the upfront costs and reduce the barrier to entry to housing for some tenants. The new law may be more likely to affect smaller landlords as opposed to large institutional landlords who have large properties, sophisticated marketing campaigns, and may not need the services of a broker to help them identify prospective tenants.
If you have questions or would like to discuss these matters, please contact Drayton Law at 508-618-7309.
This blog is for informational purposes only. It should not be considered legal advice. All those who read this blog should seek the advice of a professional before taking action based upon any information provided herein.
