Who Pays the Broker Fee When Renting?

Hello. The answer to who pays broker fee for rental is generally the tenant. But if you want a straight and applicable to all situations answer, the brokerage fee is paid by the party that hires the broker. At times, landlords seek a broker’s help to find tenants for their property. But since you are asking when renting, this comes from the point of view of the tenant, so they are liable to pay the brokerage fee. 

In general, the brokerage fee is equal to one month's rent, but it can go as high as 3 months' rent in tier 1 cities in premium localities and the house.

At times, another scenario arises where the brokerage fee is split between the landlord and tenant, but this is a rare occurrence. This happens generally when one party negotiates with the other and asks for a split. I hope this will be helpful to you.

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I currently live in a rented apartment, and before moving in, I hired a broker to assist me in finding a suitable place that fit my budget. As I hired the broker to assist me in my home renting process, I had to pay him. If you have ever rented, you are aware that this fee can dramatically increase your initial expenses. However, who pays broker fee for rental: the landlord or the tenant? The answer depends on, who hired the broker in the first place.

Who Pays Rental Agent Fee?

1. The fee is often paid by the person who hires the broker. The broker is often paid by the landlord if they hire them to find a tenant. On the other hand, the tenant is required to pay if they hire a broker to help them discover a property. 

2. Tenants in cities like Delhi, Bangalore, or Mumbai often pay the brokerage fee, which is typically equivalent to one month's rent. 

3. Brokers may even charge up to three months' rent, divided between the owner and the renter, in premium properties or in high-demand locations. 

To avoid surprises and make well-informed rental decisions, always double-check brokerage conditions beforehand.

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Usually, the renter or tenant has to pay the brokerage fee if they have taken the broker’s help in finding a suitable property. However, you should also know that these real-estate agents provide services for both renting and selling of properties. We bought our first flat with the help of a broker, so I have a bit of an idea about this. So, let me help you understand who pays the broker fee when renting. 

Who Pays Broker Fee for Rental?

Whether you’re a seller or a renter, usually brokers charge a minimum amount similar to one month’s rent, and a maximum amount of 3 months’ rent in cities like Mumbai and Bangalore. There are several factors that affect these charges. For example, the rental rates vary from city to city, and sometimes it can vary based on the locality as well. These rates will significantly affect the brokerage fees. Here are some more factors to consider.

1. Property Type

2. Rental Tenure

3. Market Trends

What are the Brokerage Fees for Renting in India?

As mentioned above, the charges will depend on the city you live in. The brokerage fees are typically higher if you’re based in Bangalore or Mumbai, and lower if you’re from cities like Kolkata and Chennai. 

So, you can see the differences in brokerage fees in all the major cities. These fees are usually negotiable, so I’d suggest you shortlist a few apartments/properties and then look for the most suitable one before starting with the negotiations. 

If you’re a landlord and want to avoid paying brokerage fees,

But, if you are a tenant you can

Read more

How Can an Owner and a Tenant Make an Agreement without Paying Brokerage?