Tenancy fee shows failure of letting-fee ban

Nov 19, 2018 | News

A law change was passed at the start of this month to ban letting fees, which are usually equal to a week’s rent, which on average is $421, plus GST. The ban comes into effect on December 12.

As part of the Government’s policy of “making life better for renters”, Housing and Urban Development Minister Phil Twyford argued that there was no economic rationale for the fee and that a ban would save tenants $47-million a year.

But property managers do need to be paid for advertising, conducting viewings, and checking out prospective tenants.

So, property management firm Quinovic last week wrote to property owners to say that because the removal of letting fees would have a “considerable adverse impact” on their business, a tenancy fee of $550 plus GST would be charged to owners.

It will be over to rental property owners either to recoup the fee by adding around $10 a week to rent, or pay without recouping it.

In the current environment of strong demand for rental property, owners can charge extra so they most probably will.

The Minister was advised that a ban on letting fees would have a moderate impact on property managers, according to a response to questions under the Official Information Act.

The Minister didn’t listen and the only surprise is the speed with which property managers have responded, Mr Butler said.

A tenancy fee charged to owners and recouped from tenants would not make life better for renters as the Minister intended, and may possibly make it worse, Mr Butler said.

The group Stop the War on Tenancies aims to empower both owners and tenants in the face of ongoing Government ineptitude with housing.

See Tenancy fees for landlords replace banned letting fees https://i.stuff.co.nz/business/108595008/tenancy-fees-for-landlords-replace-banned-letting-fees

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