Does the NAR Settlement Affect Rentals? What Real Estate Agents Should Know

With all the buzz about the recent NAR commission settlement, many agents are asking: “Does this apply to rentals?” Renting and property management are big parts of our business, and it’s important to clarify if the new rules and practices extend to those transactions. The short answer: the settlement’s changes are focused on residential sales (1-4 unit properties), not rentals. However, there are a few nuances to consider. In this post, we’ll break down how (and if) the NAR settlement changes impact rental transactions, so agents in every state can proceed with confidence. (After all, an informed agent is a better agent – something we emphasize in continuing education for real estate professionals!)

New Rules Focus on Home Sales, Not Rentals

The core changes from the NAR settlement revolve around how buyer’s agents are compensated and the requirement of written buyer-broker agreements before showings nar.realtornar.realtor. These were designed for the context of buying and selling homes. When it comes to rentals, the dynamic is a bit different:

• Buyer broker agreements (BBA) not required for renters: The new NAR policy that an agent must have a written agreement with a buyer before touring a home is generally limited to buyers of residential properties (one-to-four units), not tenants. For example, Stellar MLS clarifies that use of a buyer broker agreement is only required for touring/showing residential 1–4 unit properties, and “there will be no requirement for a BBA when showing rentals to potential tenants.” stellarmls.comstellarmls.com. In other words, if you’re working with a renter, you typically do not need to have them sign a formal representation/compensation agreement before showing a lease listing. The rationale is that the settlement and lawsuits were about home purchase commissions, not rental agent commissions.
• MLS compensation offers on rentals: Many MLSs have decided to remove or hide the offer of compensation field for all property types, rentals included. For instance, Bright MLS (covering multiple East Coast states) announced that the compensation fields would be removed from all property types, including rentals brightmls.com. This is likely done for simplicity and consistency. However, NAR’s settlement itself didn’t explicitly target rentals – it was about sellers and buyer agents. Some MLSs (like Stellar in Florida) note that the requirement to remove published offers of compensation applies to residential listings; rentals were already a bit different in many MLSs. In practice, many rental listings do offer co-op commissions (e.g., half a month’s rent to a tenant’s agent) – whether those will continue to be displayed might vary by MLS. If your MLS has pulled the field entirely, you may need to find compensation info in the agent remarks or call the listing broker for details on rental commissions.
• No mandated changes to leasing contracts: The settlement didn’t impose new terms on listing agreements for rentals or tenant representation agreements. It primarily affected listing agreements for sales (e.g., adding new disclosures about commission negotiability) and buyer brokerage agreements for purchases nar.realtornar.realtor. Leasing agreements between landlords and listing brokers, or between tenants and tenant agents, remain governed by state/local practice. There’s no new NAR rule saying a tenant must sign anything akin to a buyer-broker agreement. Of course, local or state regulations could have their own requirements (some areas have tenant representation agreements, but they’re not common).

The Rental Commission Landscape

In rental transactions, typically either the landlord or the tenant (or both) pay agent fees depending on the market. For example, in NYC it’s common for tenants to pay a broker fee; in other places, landlords pay a commission to the listing agent who might share it with a tenant’s agent. These practices were not the subject of the NAR lawsuits, so no direct changes were mandated there. That said, the spirit of transparency could carry over. It’s always good practice to disclose to your client (landlord or tenant) how the rental commission works. In fact, many states require licensees to disclose in writing who they represent in a lease and possibly how they’re compensated (for instance, agency disclosure laws often cover rentals as well).

If a landlord is offering a commission to a tenant’s agent, that’s usually stated in MLS and still can be – the settlement’s MLS rule change was specifically a prohibition on publishing offers of compensation for sales listings. An MLS could interpret it broadly, but NAR’s FAQ indicates the intention was about sales. (One Reddit discussion among Realtors noted that “new rules do not apply to rentals, land or commercial” reddit.com – although always double-check with official sources and your MLS.)

MLS Policy: Check Your Local MLS

So, does the settlement affect rentals? It depends on how your MLS implements changes. Some MLSs may have decided, for consistency, to remove the display of co-op commissions on all listings including rentals. Others might leave rental commission offers visible since the settlement technically didn’t demand their removal. Bright MLS’s stance was yes, they removed them brightmls.com. Stellar MLS explicitly said rental listings are “exempt” from the new requirement (meaning you don’t need a BBA for rentals, and presumably they did not change how rental co-broke info is handled aside from not showing it publicly which wasn’t done anyway) stellarmls.comstellarmls.com.

As an agent, stay tuned to updates from your MLS. Most have released member guidance on the changes. For example, some MLS FAQs address: “Do the buyer broker agreement requirements apply to rentals?” with answers like “No, showing rentals to tenants does not trigger the requirement” stellarmls.com.

Also, consider if your brokerage has any policy. Some brokerages might say, “even though not required, maybe we want written tenant rep agreements.” But that would be an internal decision, not NAR-mandated.

Best Practices When Working Rental Clients Now

Even if you don’t have to do anything differently by rule, it’s wise to adopt a few best practices in this new era of transparency:

• Discuss commission with your client upfront (landlord or tenant). If you represent a tenant, clarify whether you expect the tenant to pay you or if you anticipate the listing side offering a commission (and how much). For instance: “In this area, typically the landlord offers half a month’s rent to the renter’s agent. I will confirm for each listing we view. If a landlord doesn’t offer any commission, we’ll discuss what arrangement works for us.” This proactive communication mirrors the spirit of the new sales rules – no more assumptions without discussion.
• Check MLS or ask about co-op fee on each rental listing. Don’t assume it’s there. If the MLS no longer displays it, contact the listing agent: “Hey, our MLS isn’t showing co-op commission on rentals now – can you confirm if there’s a commission offered for a tenant’s agent on your listing at 123 Main St.?” This ensures you know if you’ll get paid by the landlord or need to seek payment from the tenant. (Remember, under the Realtor Code of Ethics, if a listing broker is offering compensation, they’re obligated to communicate it to cooperating brokers even if it’s not in MLS print – now it might be via a phone call or a note.)
• If you primarily do leasing, stay informed. While the NAR settlement changes may not directly force new procedures in rentals, the industry’s general move toward transparency and written agreements could eventually influence leasing as well. For example, some states might decide that written compensation agreements should exist for tenants similar to buyers. (Already, California passed a law effective 2024 requiring brokers to have a brokerage services disclosure and fee agreement with buyers and sellers, though it doesn’t mention tenants explicitly.) It’s not far-fetched that future real estate license law updates or CE courses will touch on handling rental commissions more explicitly.
• Continue ethical practices. Just as with sales, Realtors should avoid any hint of unethical steering in rentals. If a landlord isn’t offering a commission, you shouldn’t refuse to show the property to your tenant if it fits their needs – you can always negotiate a solution (maybe the tenant pays you, or you negotiate a small fee from the landlord). Our ethical duties to clients apply across sales and leasing alike.

The Bottom Line

Rental transactions aren’t the target of the NAR settlement changes, so you won’t suddenly need new forms or scripts for your tenant clients the way you do for buyers. No, you don’t need to ask a renter to sign a 12-page buyer-broker compensation agreement before you unlock an apartment door. And no, a landlord isn’t part of a class action about commissions (those suits were about home sellers). The core framework for rentals – who pays the agent – remains as it was.

However, it’s a good moment to ensure you’re being just as transparent in rentals as we now must be in sales. Make sure your landlords know if they’re expected to pay part of a commission to a tenant’s agent. Make sure your tenants know if you’ll seek a commission from them in some cases. Essentially, communicate and document key points, even if not formally required.

Lastly, if you also handle sales, apply what you’ve learned there to your rental side, and vice versa. An agent well-versed in both worlds can offer clients well-rounded advice. For example, a landlord client might ask, “Hey, does that commission lawsuit affect me when I go to sell this rental property?” – and you’ll be able to explain the differences confidently. Keeping educated (through resources like this blog, NAR updates, and real estate CE courses online) ensures you stay the trusted expert for your clients, whether they are renters, buyers, or sellers.

Sources:

• Stellar MLS – Listing Compensation Updates (FAQ) stellarmls.comstellarmls.com (clarifying no BBA needed for rentals)
• Bright MLS – Summer 2024 Updates: Top Questions brightmls.com (noting comp fields removed for all property types, incl. rentals)
• NAR Settlement FAQ – Applicability of Practice Changes rirealtors.orgrirealtors.org (lawsuit scope focused on home sellers/buyers)
• REALTOR® Magazine – Practice Changes Take Effect nar.realtornar.realtor (ethical obligations and negotiability point)

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