In a major victory for tenant protections and housing affordability, the Newark Municipal Council has unanimously approved a landmark ordinance proposed by Mayor Ras J. Baraka that prohibits landlords and property agents from forcing renters to pay broker commissions.
Under the new law, landlords, property owners, and developers who engage real estate brokers must cover all associated broker fees themselves. The ordinance serves as a key pillar in Mayor Baraka’s broader “Keeping Newark Affordable” legislative package, designed to eliminate predatory upfront costs during a competitive regional housing market.
To read the ordinance, click here.
Lifting the Financial Burden Off Renters
For many working families and young professionals searching for housing across Newark’s five wards, moving into a new apartment historically required paying a broker’s fee equivalent to one or two months’ rent, on top of security deposits and moving expenses.
“When people rent an apartment in Newark, they too often must pay a large brokers fee or commission in addition to the security deposit of one or two months’ rent and the high expense of moving,” said Mayor Baraka. “This widespread practice adds to the major expense and stress of finding a new place to live and takes advantage of the desperate need to find an affordable apartment during a severe housing shortage. Our new ordinance lifts an unfair and unjust burden on tenants, and puts it where it belongs, on the backs of landlords, owners, developers and their agents.”
The local legislation aligns with ongoing discussions in the New Jersey Legislature, reflecting statewide momentum to reform upfront rental fee structures.
Closing Loopholes and Mandatory Disclosures
The ordinance includes strict consumer protection provisions to prevent property owners from shifting broker costs back onto tenants through indirect channels:
- No Cost-Shifting Allowed: Landlords are legally prohibited from recovering broker fees by raising base rent, adding administrative surcharges, or requesting tenant reimbursement.
- Mandatory Upfront Disclosure: All tenant-responsible fees must be clearly advertised. Prior to lease signing, landlords or agents must provide an itemized written disclosure detailing all required fees and highlighting the legal penalties for ordinance violations.
- Prohibition of Tied Brokerages: It is illegal to condition an apartment lease on a tenant engaging with a specific brokerage firm or agent.
- Affirmative Signed Statement: All rental applications in Newark must now include a written statement signed by the landlord confirming that no broker fees are being charged to the prospective tenant.
Enforcement and Financial Penalties
The ordinance carries clear enforcement mechanisms to protect housing consumers. Violations carry a fine of up to $1,250 per instance, with each improper fee charged to a tenant counting as an independent violation.
The law will be jointly enforced by:
- The Division of Rent Control (within the Department of Economic and Housing Development)
- The Newark Department of Public Safety
The ordinance officially takes effect 20 days following its passage and legal publication.
