9 Reasons to Oppose the Bill Shifting Broker Fees From Tenants to Housing Providers
by Demetrios Salpoglou
The root cause of the broker fee dilemma will not be addressed by shifting the financial burden to property owners. Small rental property owners, in particular, will be harmed by this and they will be forced to raise their rents to cover this additional expense, among other high expenses that come with property ownership.
We should instead look to alleviate pressures on both renters and owners by offering flexible and gradual payment options for broker fees, rather than demanding full payment upfront, while promoting zoning reform to incentivize the creation of additional housing supply, which is what's needed to bring costs down in the long-term.
Sadly, the proponents of this broker fee transfer proposal did not reach out to the real estate community to collaborate on sensible solutions that help all stakeholders, nor have they acknowledged the perspectives of those who actually know about housing. But nevertheless, our advocacy continues. Below are 9 reasons to oppose the proposal that would shift broker fees to housing providers exclusively.
Fairness and Equity: The bill unfairly places the burden of broker fees on rental housing providers, which will most likely lead to increased rental prices as landlords pass on these costs to tenants. In a recent poll conducted by Boston Pads, 91.3% of small “mom and pop” landlords expressed serious concern that this legislation would disproportionately and negatively impact them compared to larger corporate or portfolio landlords. Smaller landlords are much more price sensitive to changes in the real estate marketplace. Larger landlords have the ability to spread their increased costs across more properties. Both parties would ultimately be forced to raise their rents. Considering that 65% of all housing stock is owned and managed by smaller landlords the impacts could be far reaching across the state of MA. Price hikes of 8-10% to cover brokers' commissions could send rents soaring which would disproportionately affect lower-income tenants. Some tenants could leave Massachusetts entirely and seek states with lower rents and better pro-growth building policies that put a stronger focus on creating supply.
Rental Property Deterioration: According to a survey by Boston Pads, 81.5% percent of landlords believe this legislation will make it more challenging to maintain or improve their rental properties. Should the majority of landlords be forced to pay broker commissions there could be substantial deferred maintenance and lack of working capital to upgrade their rental properties – leading to an overall lower quality housing stock. There is also the very real concern of rapid increases in safety and health violations as landlords are unable to put money back into their properties. Rent control was applied in MA before the and the results were disastrous. There was a massive increase in fires and other health and safety violations because landlords simply didn’t have enough money to repair their properties properly. While not a perfect example; it is a just another thing to consider as our legislature seeks to put more cost burdens on the landlord. By continuing to increase the costs on landlords; the overall quality of our housing could go down – potentially causing professionals and working families to seek better housing in other states.
Restricts Landlord Autonomy: The bill limits Landlords and property managers ability to choose how they engage with brokers. According to a survey done by Boston Pads, 64.4% of landlords do not provide exclusive leasing contracts to brokerages and prefer to give their apartment listings to multiple offices. This new bill would hamper that business decision. This bill would hamper the landlords ability to showcase their property to the widest possible audience in the most effective manner possible. Increased vacancies could result as well as inefficient procurement of apartments in a timely manner.
Legal Complexities: According to a survey conducted by Boston Pads, 65.5% of Landlords believe that if they were forced to rent properties on their own, they would experience potential financial harm through having to navigate legally compliant paperwork. Many landlords fear that they may be forced to rent their properties on their own and that would open them up to unscrupulous lawyers seeking to exploit them for imperfect paperwork. Lawyers would also charge them for additional paperwork and addendums at a much higher cost than real estate agents. The state of Massachusetts has a multitude of regulations surrounding rental property, lease forms, disclosures and requirements. Most property owners, specifically small property owners, don 't have the time, nor the bandwidth to keep up with these regulations. Additionally, according to a survey conducted by Boston Pads 88.5% of landlords believe they have the legal right to suggest any fee structure they choose. By imposing more rules, legal oversight and other requirements – this could drive rental prices higher as landlords seek to recoup these additional costs.
Market Dynamics: By restricting who can pay the broker fee, the bill could disrupt the natural market dynamics where both landlords and tenants might benefit from flexibility in fee arrangements. This legislation could add time and complexity to leasing transactions while reducing volume. When greater complexity is added to renting properties – tenants will tend to stay longer. With lower turnover- prices could go higher potentially leading to higher overall transaction fees on apartment rentals. Brokers and property managers could face loss of jobs and businesses could close due to less volume.
Tenant Choice: The bill limits the choices tenants have in how they engage with brokers. Some tenants might prefer to pay a fee for exclusive services, such as finding a rental that meets specific needs or negotiating better lease terms, this bill prevents that option.
Broker Incentives: If the majority of the fees are to be paid by landlords, their incentives might shift away from serving the best interests of tenants, potentially leading to a decrease in service quality for tenants.
Economic Impact: There was never an economic impact study performed to examine how this legislation would impact the economy as well as real estate industry. Brokers will need to alter their business models, which could affect employment, hiring numbers and the overall health of the real estate market. Many real estate brokerages that focus on rentals have indicated they believe that there could be a 50% reduction in rental agents in MA. This potential loss of jobs could impact local businesses. Rental agents may choose to leave the state and find jobs elsewhere in real estate.
Impacted Property Owners: In a recent survey conducted by Boston Pads, 73.6% percent of landlords believe that if real estate agents exit the industry due to less opportunity that it would negatively impact their real estate business. Most landlords express that leasing agents provide a valuable and meaningful service to their livelihood.
by Demetrios Salpoglou
SPOA Pays Tribute to Diane Arenella, 1938-2025
by Amir Shahsavari
We were saddened to learn of the passing of Diane Arenella, who served for many years on the Small Property Owners Association (SPOA) board of directors. Diane was generous and thoughtful, while lifting others with her humor.
A graduate of New York's Nottingham High School in 1956, Diane earned degrees in biology, chemistry, and education from Russell Sage College in 1960. She then worked at Boston University Medical School as a research assistant in neurology from 1960 to 1967. During this time, Diane admired the architecture of Boston's South End neighborhood during her drives to work, prompting her to purchase a house there in 1966.
Diane went on to work as a broker in the 1970s for Betty Gibson, who would later found Gibson Sotheby’s International Realty. While raising her own family and living in West Newton, Diane would eventually return to the South End, which she always held in high esteem.
Besides real estate investment, Diane contributed to her community in other ways. She served on the advisory board of the Cambridge Greek Institute, celebrating Greek culture, language, and achievement. She also served as a board member and fundraiser for The Children’s Art Centre, which was the first public fine arts museum designed for children. Moreover, Diane was an early member of the South End Neighborhood Association, in addition to a SPOA board member.
Diane's other passion was traveling, as she visited Nepal, India, Indonesia, Thailand, Greece, Italy, and Turkey among other countries. We will miss her warmth, her grace, and her wisdom. Diane and her family remain in our thoughts, as we celebrate her life and legacy.
by Amir Shahsavari
SPOA Releases Episode 16 of Housing Policy Series with "The Volunteer Lawyers Project"
by Amir Shahsavari
The Small Property Owners Association (SPOA) has released Episode 16 of SPOA Housing Policy Series, which is called "The Volunteer Lawyers Project."
Although small landlords are not confined by definition to the number of units they own, or whether they live inside their rental properties, a smaller subsection within this community includes lower income housing providers who live in their rentals and who need more help navigating various challenges. The conversation centers on the mission and the services provided by the nonprofit Volunteer Lawyers Project (VLP) in helping these particular owners on a pro bono basis.
The panel includes VLP Attorneys Kevin Walsh and Sarah Mullis, in addition to Paralegal Amana Hill.
SPOA Vice President, Amir Shahsavari, moderates the discussion.
You can see the video in the link below.
SPOA Vice President, Amir Shahsavari, moderates the discussion.
by Amir Shahsavari