“Broker Fee Ban” Signed into Law via Budget; Zillow Application Fees Apparently Banned

Legislators and media allies are taking credit for a “broker fee ban,” which passed into law as part of the state budget July 4, 2025. We’ll show how this “ban” only changes how costs land on renters. To echo one journalist we spoke with, “This is more complicated than I thought.” Brokers and landlords should be able to comply with minimal changes to process. Zillow will have to make substantial changes.

A screenshot of the Fiscal Year 2026 budget still does not reflect accurate status as of July 8, 2025. The budget was signed July 4. (Image: Public Domain)

Unfortunately for renters, this law does not create better rental housing. It is housing affordability neutral.

What Does the Broker Fee Ban Say?

The Fiscal Year 2026 state budget contained a provision amending Section 87DDD1/2 of Chapter 112 of the General Laws. (The legislature might consider adopting revision management software, which would help eliminate shoehorned section numbers like “three Ds and a half.”) The law is wordy, but it’s short enough to reproduce the full text here:

A licensed broker or salesperson may solely contract with a prospective tenant to find rental residential real property for a tenant and present an offer to lease to the landlord or landlord’s agent and negotiate on behalf of the tenant or may solely contract with a landlord or landlord’s agent to find a tenant for a property. Any fee shall only be paid by the party, lessor or tenant who originally engaged and entered into a contract with the licensed broker or salesperson.

In plain English, a rental broker can contract with either the renter or the landlord. Whoever hires them first is responsible for the fee.

What Problem Were We Trying To Solve?

Earlier this year, advocacy on TikTok and other social media channels promoted some municipal ordinances intending to regulate broker fees, especially in Boston. The TikTok posts shamed unnamed brokers who allegedly did nothing but unlock the door to an apartment and then got paid one month’s rent. The primary misinformation was that Boston was somehow the only market in the country with rental brokers. (To the best of our knowledge, no one has conducted a nationwide study of even the top markets, let alone all urban areas. Casual searches on Reddit for other major metro areas like Chicago indicate renter payment of brokers exists elsewhere.) The intent in all this was simply to eliminate broker fees paid by tenants.

Wasn’t It Already Illegal To Charge a Junk Broker Fee?

Yes. Under General Law Chapter 186 Section 15B, landlords may not charge anything other than first month’s rent, last month’s rent, a security deposit and the cost of changing the locks. Decades of case law have already established that landlords may not actually collect or even require anything with monetary value in excess of these four items. This means the following have been banned for decades:

• Pet deposit.
• Application fee, whether paid to Zillow or otherwise.
• Renter’s insurance, whether paid to the landlord or an insurance broker.
• Broker fee, whether paid to the landlord or a real estate broker.

Furthermore, real estate brokers have likewise already been regulated. Under 254 CMR 7.00, brokers may not charge a fee without a renter’s written consent. We wrote about this.

Even before the new budget language, it was unlawful for a landlord to contract with a broker and require the tenant to pay that fee. And it was unlawful for a broker to charge a renter without an agreement in writing in advance of showing the apartment.

If It Was Already Illegal, Why Was It Commonplace?

Boston, Cambridge, Somerville and a few other markets are extremely tight markets for renters. Many renters will therefore rationally forgo some rights under statute in order to get the apartment they want. Couple this with lax enforcement, and it’s easy to find landlords who are noncompliant. Some have said of their noncompliances, paraphrased, “I’ve been doing this for 40 years;” the reason is non-enforcement.

What Will Change Because of the Law?

The law contains no enforcement language. In political science terms, Massachusetts is a “weak enforcement” state. We cannot actually enforce much, so we rely on scaring people into voluntary compliance. But people weren’t following the law already. So here are four types of behaviors we expect to see, not all of which are compliant:

1. Some landlords and their brokers will continue to require unlawful broker fee arrangements. Renters will continue to pay because of a combination of lack of education, lack of enforcement and desire to get an apartment.
2. Some landlords will be scared into paying for the broker.
   1. Some percentage of these will raise the rent to recover this cost.
   2. Some percentage will not raise the rent directly because of the broker costs. This is the sliver of the population actually addressable by this law.
3. Some landlords will prefer to consider an application from a renter represented by a broker, and renters will hire brokers at their own expense.

What Do Good Brokers Do?

A broker is licensed by the state; all brokers are required to be licensed and are regulated under General Law Chapter 112 Sections 87PP through 87DDD1/2, a combined total of 20 sections of law. No one can call themselves a broker without being licensed (Section 87RR).

When representing a landlord, a good broker will screen applicants. This can involve more or less work depending on the state of the apartment. An apartment in good shape may have many households inquire during peak season. Good brokers maintain accounts with listing services and background check companies. They do some of the landlord’s work to fill the unit. Surprisingly, a landlord-paid broker may also help renters by applying fair housing law and screening all applicants according to objective criteria.

When representing a renter, a good broker will help sift through hundreds or thousands of listings to find an apartment that meets their needs for which they can qualify. A good broker will also help a renter apply. For example, a Section 8 renter may not be able to explain the Section 8 program to their prospective landlords, but a good broker can. Or an international student may not know how to apply for an apartment here without U.S. credit, but a good broker can help the renter pull their international credit, document income or savings, or otherwise qualify. Surprisingly, a renter-paid broker may help landlords by preparing passing applications the first try.

Good brokers are inherently dual-sided. Good brokers make the market.

Broker agreements can be scoped to one or more units. A broker could sign with a renter to show a single unit, or could agree to show an unlimited number of units until the renter accepts an offer of tenancy, or anything in between. A broker could sign with a landlord to rent a single unit, or to manage all vacancies in a building for a period of time, or anything in between.

Prior to the passage of this law, a good broker would disclose dual representation: They could represent the renter for the application and then represent the landlord for tenant screening. This was commonly practiced especially in Section 8 and international student markets, where good brokers would charge half a month’s rent to each side of the lease-up for duties and obligations to each.

Can Brokers Still Maintain Relationships With Both Landlords and Renters?

Yes, nothing in the bill prohibits a broker from already knowing or having a professional relationship with both renters and landlords. If the relationship is formalized with a contract, then the person who signed the contract must pay for the broker. If both landlord and renter on a single transaction signed separate contracts, the first person to sign must now pay.

Non-contractual, informal relationships are not subject to the law. A broker could have a relationship with a network of housing providers, sign renters to pay all the fees, and then shop the renters around primarily to those in-network housing providers. Think about it this way: That’s what brokers do anyway. The law does not ban brokerage, nor does it stipulate that brokers must operate arm’s-length or contact only unknown landlords. It just clarifies who pays when a contract is in place. No contract? No change.

Can Landlords Require Renters Come With Their Own Broker?

No, this was not allowed under General Law Chapter 186 Section 15B even before this law passed.

Can Landlords State a Preference for Renters To Come With Their Own Broker?

Probably not. Consider for a moment a different example. A fixed-income retiree approaches you and asks to prepay the year’s lease. As the landlord, can you accept that offer? Chapter 186 Section 15B says we cannot require anything other than first, last, security or locks, and we cannot require any more than one month at a time. What if it’s the renter’s wish? Different judges have decided different things. Some limited case law has allowed prepayment if there wasn’t a hint of the landlord requiring it; other cases have come down so hard on prepayment that unrelated evictions have been dismissed for the apparent violation. All this makes prepayment a legal gray area.

Expressing a preference for a renter to bring their own broker likely falls into the same gray area.

Can Landlords Award More Points on an Application for Renters Working With a Broker?

Apparently so. A good broker paid for by the renter can still make the landlord’s job easier by preparing all information, running the background check and making sure the application has all required information the first time. If the broker knowingly submits false information, the broker’s license could be on the line.

The following checklist will tend to increase compliance for any landlord who wants to give more points for an applicant working through a broker:

1. The landlord should work with any renter’s broker and should not be exclusive to any one broker.
2. There should be no contract between the renter’s broker and the landlord.
3. Applicants should NOT be advised to hire a broker at their expense. See above, “Can Landlords State a Preference for Renters to Come with their Own Broker?”
4. The renter should sign a contract with their broker per 254 CMR 7.00.
5. The landlord can award more points on an applicant qualifier for representation.

Talk with your attorney before modifying your applicant qualifier to award more points for representation; they will have to defend your decision.

To be clear, in all cases a broker paid by a renter should prepare the renter’s application or do other meaningful work for the renter. This was always the case even before the new law.

What About Zillow? How Are Zillow Application Fees Now Banned?

Zillow operates with a single real estate broker license in Massachusetts. This means it is subject to the new broker law. If Zillow ever engages a landlord first and subsequently charges a renter for their application, Zillow will not be in compliance.

Arguably, Zillow cannot be in compliance under its current business model. Zillow creates contractual obligations with both landlords and renters via its terms of use, which are required to use the service. It has to sign the landlord first before the renter can apply to an apartment. (If there were no listings, why would any renter enroll?) Under the law, Zillow as broker must therefore collect its fee from the landlord. Under present business practice, Zillow charges Massachusetts renters $35 for an “application fee” that gives renters 30 days’ access to apply to different landlords.

Whatever Zillow calls the fee is immaterial. Zillow must be a licensed broker to help renters apply. They are in fact a licensed broker. They have preexisting contractual relationships with landlords. The $35 is a fee paid to a broker and subject to the law. Arguably, Zillow can no longer charge a $35 application fee to Massachusetts renters.

It is unclear how Zillow could adapt its current model easily. Zillow may try to switch its model to charge the landlord $35 for a signed agreement. It is difficult to imagine enforcing this, when a landlord and renter who find one another on Zillow may lie to Zillow and say they didn’t end up signing a lease. In any event, presumably many more renters pay the fee than get apartments via Zillow, so Zillow’s revenue may decrease.

Zillow likely will have an army of attorneys and lobbyists to carve out an exemption for itself. Alternatively, there may be litigation by or against Zillow.

We have advised landlords since 2018 not to require or prefer the Zillow application. Landlords should use the MassLandlords rental application and treat screening as cost of doing business; free things to check should be checked first, before paid data sources. Landlords can list on Zillow without using the Zillow application. To learn tenant screening, take our crash course.

Can a Landlord Offer One Price for Represented Renters and Another for Others?

Probably not. Showing two prices where a renter-borne cost is involved is likely to run afoul of Chapter 186 Section 15B, which prohibits landlords from requiring up-front costs other than the four listed.

Can a Landlord Still Hire a Broker To Screen Tenants?

Yes, a landlord can still hire their own broker to do showings and review the prepared applications. The landlord will pay for the broker directly, and may raise asking rent to compensate.

Can a Brokerage Have Agents Representing Both Renters and Landlords on the Same Deal?

Apparently so. There is no case law yet, but the law seems to be about the person who holds the license rather than the organization for which they work. If there are multiple licensed brokers in an office acting independently on a deal, one licensee can represent renters and another can represent landlords. The fees can be different for each. The two brokers can collaborate on the same deal as long as the contractual obligations go with one license on either side.

There is nothing in the law restricting brokers or brokerages from having informal or contractual relationships with one another.

Can a Broker Charge Half a Month’s Rent, or Three Months’ Rent?

Apparently so. There is nothing in the law limiting what a broker charges. Brokers are subject to the anti-discrimination law, General Law Chapter 151B Section 4, but otherwise brokers can adapt, change their services, and charge as much or as little as their market will bear.

Can a Broker Charge Renters a Fee for No Apartment?

Yes. 254 CMR 7.00 is explicit in allowing for a broker to charge a fee even if no apartment is obtained. The fee must be agreed to in writing.

One unintended consequence could be overstated broker promises to find an apartment. “Hire me for a fee and I’ll submit your application to 100 apartments.” Such shotgun approaches might generate large amounts of money for renter-facing brokers and still comply with General Law Chapter 93A even if the renter never finds an apartment as a result.

What Would Happen if We Eliminated All Move-In Monies?

Eliminating move-in monies is a form of price control. As such, a phenomenon called “availability discrimination” would result. This means landlords would hold apartments vacant longer waiting for a renter who fits the desired risk profile. This has been theoretically modeled and experimentally confirmed, see for instance seminal work by Heikki Loikkanen, 1985.

For Renters: What Should a Renter Expect To Change?

Little will change. Under the new and existing law combined, a landlord can award more points for applicants that bring a broker. (It should not be a requirement.) The landlord should not say they are working with a particular broker and require you to pay for that one. You can hire your own broker at your own expense.

If you as a renter see a listing and contact the property owner, you may be directed to pay the landlord’s broker. This would be unlawful, but there is no additional money for enforcement in the state budget. If you attempt to sue the landlord, you will lose the apartment, and the case will take several years.

When inevitably you find a non-compliant landlord, you should do what it takes to get the apartment. Always speak with an attorney. Apartments are in short supply, and we don’t want you to do anything to hurt your chances. The fact that the legislature made a weak, unenforceable law is not your fault. You can attempt to enforce your rights once you have the apartment.

A landlord might suggest several brokers for you to evaluate and hire on your own. Alternatively, a landlord may say they are paying for the broker. A landlord who pays for a broker may increase the rent as a result.

Renters can look up a Certified Massachusetts Landlord™ to find whether there is additional enforcement available for any landlords operating noncompliantly.

What Would Be the Penalty for a Noncompliant Certified Massachusetts Landlord™?

A Certified Massachusetts Landlord™ could have their certification revoked for non-compliance. This would remove them from the public lookup.

What Would Be the Penalty for a Noncompliant Landlord in General?

A renter would have to bring suit under General Law Chapter 93A for violation of Chapter 112 Section 87DDD1/2. This could get the renter three times whatever the broker fee was, plus attorney’s fees.

In actual practice, renters can be risk averse and may not litigate. See for instance the Ashley Security Deposit Story.

Why Doesn’t This Bill Fix Anything?

For starters, housing is very complex. There is insufficient technical expertise in the legislature to address housing as its own multidisciplinary problem. Pushing downs costs in one area cause them to spring up in another.

Second, as mentioned above, political science describes Massachusetts as a “weak enforcement” state. This means we rely on showy trials to scare people into voluntary compliance. In general, we don’t have the resources to require correct behavior in every instance.

Overall, some landlords used to require unlawful broker fees. Those landlords are unlikely to read the law now. The new law comes with no additional enforcement.