Massachusetts has enacted a major change to rental housing rules that shifts the financial responsibility for broker commissions. The law is new and leaves several questions unanswered – we expect regulations and further guidance to be released in the coming months.
In the meantime, here are some highlights of the new law (as we understand it):
As of August 1, 2025, rental brokerage fees must be paid by who hired the broker.
- If the landlord hired the broker, the landlord pays the fee.
- If the tenant hired the broker, the tenant pays the fee.
Tenants:
- If you do not hire a broker, then you should not be charged a fee.
- If you choose to hire a broker for representation, then you will be responsible for a fee.
Landlords:
- If you hire a broker to market and lease the property, you must pay the fee (it is illegal to attempt to pass that through to the tenant by way of surcharges).
- Landlords may legally raise the amount of rent that they are seeking for the apartment.
Leases signed before August 1 remain valid under their original terms (including with respect to the broker fee obligations).
We are continuing to monitor the impacts of a similar law on New York City’s rental market (that law went into effect a little ahead of the law here in Massachusetts, so it is a useful case study), as well as how our local market is reacting to the new law (e.g. rent increases and other side effects). We are also awaiting further guidance/regulations from the legislature.
If you have any questions or concerns, please reach out to us.