Real Estate Board of New York, Inc. v. The City Of New York
- Ronnie Abrams
- 1:24-cv-09678
- U.S. District Court · Southern District of New York
- 7
In Real Estate Board v. City of New York, Judge Abrams denied plaintiffs’ injunction pending appeal, finding they lacked a strong likelihood of success and other factors favored enforcement.
The ruling directly affects the plaintiff trade associations, real estate brokerage firms, and landlords, as well as the City of New York and Commissioner Vilda Vera Mayuga. It leaves the FARE Act enforceable while the plaintiffs’ appeal proceeds, affecting residential tenants and brokers covered by the Act.
What happened
Real Estate Board of New York, Inc. v. The City Of New York concerns plaintiffs’ challenge to the Fairness in Apartment Rental Expenses Act, which generally bars residential brokers from charging tenants brokerage fees for certain listings or landlord-related services. Plaintiffs asked the court to stop enforcement while they appealed an earlier order.
The court denied that request. It found that plaintiffs were unlikely to succeed on their arguments that the Act receives heightened constitutional review or that the City lacked evidence that unsolicited brokerage fees contribute to housing immobility. The court also found that an injunction would substantially harm the City and conflict with the public interest in enforcing the law.
Judge Ronnie Abrams ruled that plaintiffs’ motion for an injunction pending appeal was denied. The ruling left the Act enforceable while the appeal proceeds and did not change the earlier rulings on the individual claims.
The detailed version
- Real Estate Board of New York, Inc. v. The City Of New York · No. 1:24-cv-09678
- Ronnie Abrams
- July 10, 2025
Background
The Fairness in Apartment Rental Expenses Act, or FARE Act, took effect on June 11, 2025. The Act generally prohibits residential real estate brokers from charging tenants brokerage fees for properties where the broker either published a listing with the landlord’s permission or agreed to work for the landlord. The City Council identified unsolicited brokerage fees as a significant financial burden that can limit renters’ ability to move between properties.
The plaintiffs—trade associations, real estate brokerage firms, and landlords—sued the City of New York and Vilda Vera Mayuga, the Commissioner of the New York City Department of Consumer and Worker Protection. They sought to stop the City from enforcing the FARE Act. In an earlier order, the court granted the City’s motion to dismiss the plaintiffs’ First Amendment, New York State Constitution, and state-law preemption claims; denied the motion as to the plaintiffs’ Contracts Clause claim; and denied the plaintiffs’ preliminary-injunction motion in its entirety. The plaintiffs then filed a notice of interlocutory appeal.
Motion and legal standard
The motion addressed whether the court should issue an injunction pending appeal under Federal Rule of Civil Procedure 62(d). The court explained that the party seeking this relief must ordinarily show four factors: a strong likelihood of success on the merits, irreparable harm without an injunction, limited harm to other interested parties, and that the public interest supports an injunction. The first two factors are the most important, although the strength of one factor can affect how much is required of the others.
Court’s analysis
The plaintiffs argued that the court had erred by rejecting their position that the FARE Act should receive heightened review under Sorrell v. IMS Health Inc. and by concluding that the Act materially advances the City Council’s interest under the test for commercial-speech regulations established in Central Hudson Gas & Electric Corp. v. Public Service Commission.
The court rejected those arguments again. It said that Sorrell involved a law targeting particular speakers and messages based on the purpose and content of speech, while the FARE Act regulates listings without regard to their content. Although the Act applies to brokers, the court stated that brokers are primarily responsible for advertising open listings and that the distinction is justified by the characteristics of New York City’s rental market. The court therefore concluded that the plaintiffs were unlikely to succeed on their argument for heightened review.
The court also rejected the plaintiffs’ economic analysis and their contention that the City Council lacked evidence connecting brokerage fees to housing immobility. The court relied on survey and investigative evidence cited in the earlier opinion, including findings that average upfront moving costs equaled 14 percent of the city’s median household income, 60 percent of renters said brokerage fees prevented them from moving, 54 percent would prefer higher monthly rent to a brokerage fee, and brokers often refused meaningful negotiation even though fees were technically negotiable.
The court concluded that the City Council’s decision to eliminate unsolicited fees was based on more than speculation. It also said that the City Council was permitted to choose a policy that addressed the harm identified by a substantial portion of renters, even if other renters preferred the option of paying a brokerage fee. The court stated that this policy judgment was not, by itself, a constitutional violation.
Ruling
The court held that the plaintiffs had not shown a strong likelihood of success on their appeal. It further found that the City would be substantially injured by an injunction and that the public had an interest in seeing the FARE Act enforced. Those considerations outweighed any harm the plaintiffs might suffer without an injunction.
Judge Ronnie Abrams therefore denied the plaintiffs’ motion for an injunction pending appeal and directed the Clerk of Court to terminate the motion. This order addressed the requested interim injunction; it did not alter the earlier rulings on the claims.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.