Change to Broker Fee Law in Massachusetts Set to Take Effect 8/1/25

As of July 8, 2025, a major legislative change is underway in Massachusetts that will significantly affect the residential rental market. Included in the state’s Fiscal Year 2026 budget, the newly signed provision will prohibit landlords from requiring tenants to pay broker fees—unless the tenant independently hires the broker themselves. This change, signed into law by Governor Maura Healey on July 2, 2025, is scheduled to go into effect on August 1, 2025. The goal of the legislation is to eliminate what advocates describe as a "junk fee" and to reduce the upfront financial burden on tenants, particularly in high-cost rental markets like Boston.

Historically, it has been common practice in Massachusetts—especially in Greater Boston—for tenants to pay broker fees even when they did not choose or contract with the broker themselves. These fees, typically equivalent to one full month’s rent, are often added on top of the first month’s rent, last month’s rent, and a security deposit. As a result, tenants could be required to pay up to four months’ worth of rent upfront before even moving in. Under the new law, this will no longer be allowed unless the tenant voluntarily hires the broker.

The new policy is contained in Section 68 of the FY2026 Massachusetts budget and amends existing statutes to make it clear that broker fees must be paid by the party who engaged the broker. Specifically, the law adds the following language to Chapter 112, Section 87DDD½ of the Massachusetts General Laws, which governs the licensing of real estate brokers and salespeople:

“Any fee shall only be paid by the party who originally engaged and entered into a contract with the licensed broker or salesperson.”

This language codifies that only the contracting party—the landlord, in most leasing situations—is responsible for paying the broker fee. Furthermore, the provision updates Chapter 186, Section 15B, which outlines prohibited charges in residential leases, to affirm that landlords may not demand or retain payment from tenants for brokerage, showing, or lease processing services unless directly hired by the tenant.

This change has been covered extensively in the media and has generated significant attention among property owners, tenants, and leasing agents. According to WBUR’s coverage, tenant advocates have long argued that the current practice is unfair and lacks transparency. They note that in many cases, tenants are required to pay for services they did not request, such as listing or showing appointments arranged by the landlord or property manager. Governor Healey, in signing the bill, stated that this change will help reduce housing costs and make rental housing more accessible, particularly for lower-income renters and those moving into new cities.

Local landlords and agents are already beginning to adjust to the law. In a recent report from Boston 25 News, some landlords expressed concerns about absorbing additional costs, while others noted that they plan to increase monthly rent slightly to offset the expense. Online communities such as Reddit’s r/boston housing have seen widespread discussion, with many users posting examples of listings that still advertise “broker fee required” and asking whether they will remain enforceable under the new rules. As of August 1, listings that require tenant-paid broker fees may be in violation of state law unless the tenant has explicitly chosen to work with a broker themselves.

For landlords, this change has several important implications. First and foremost, lease agreements, listing templates, and marketing materials must be reviewed and updated to comply with the new law. Any language suggesting that tenants are responsible for broker fees—whether in application forms, listings, or lease clauses —should be removed or revised. Additionally, property managers and real estate agents working on behalf of landlords must be advised that the broker fee cannot be passed to the tenant unless the tenant directly initiated the relationship with the broker.

Second, landlords may need to reconsider their pricing strategy. With the broker fee no longer recoverable from tenants, some owners are evaluating whether to raise monthly rents slightly to account for the added leasing cost. Others are choosing to absorb the fee as a business expense in order to keep advertised rents competitive. Either strategy must be weighed against market conditions, especially in neighborhoods where renters compare listings closely based on move-in costs.

The Massachusetts Association of Realtors has not yet released formal implementation guidance, but legal experts and housing advocates are encouraging landlords to begin preparing now. Enforcement of the new rule will likely be complaint-driven, meaning tenants may file reports with the Attorney General’s Consumer Protection Division or Housing Court if they are improperly charged a brokerfee.

The full legislative language of the new law can be found in the Outside Sections of the FY2026 Massachusetts Budget, specifically Section 68, titled “Residential Rental Broker Fees.” This text can be viewed on the state’s official budget website here: https://budget.digital.mass.gov/govbudget/fy26/outside-section/section-68-residential-rental-broker-fees-1

Additional context and statements from Governor Healey are available at: https://www.mass.gov/news/governor-healey-commits-to-signing-budget-provision-banning-renter-paidbrokers-fees

For a media summary of the issue and expected impacts, Axios Boston offers a helpful breakdown: https://www.axios.com/local/boston/2025/07/07/massachusetts-broker-fees-renters

As the August 1 implementation date approaches, it is important that all Massachusetts landlords familiarize themselves with the law, understand how it affects their current leasing practices, and prepare to operate in compliance. While this change represents a shift in how leasing costs are structured, it is part of a broader statewide effort to increase transparency and affordability in the residential rental market.

This article is provided for informational purposes only and is not legal advice. Landlords with questions about their specific obligations under the new law should consult with a real estate attorney or licensed housing compliance advisor..