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by kazinator 586 days ago
It seems foolish of landlords not to care, though. Whenever there is some surcharge (commission, tax or whatever) you have to see it as the transaction paying it out. Not party A or party B. Both are robbed by the value extraction. A buyer who is made poorer cannot pay as much for what is being sold. A seller who is made poorer needs to ask more to make up for the loss.

If I'm renting out a place, and it turns out that the renter is being charged some exorbitant $2000 fee, that would severely bother me. I would advise the tenant not to pay, and give them the place anyway. The crooked broker could then try to get it from me; at most I'd give them $200, take it or leave it.

Actually, another thing, the current system described creates an opportunity for fraud. What if the landlord and broker are not at arm's length? A landlord could set up a fake brokerage operation and just pocket the fee.

If we frame the new law as not "landlord pays the fee", but "tenant does not see a fee (unless they retain a broker themselves)" then in that light it makes even more sense. If the tenant does not see a fee, then there is no space for such collusion.