Property managers to charge letting fees

Wednesday 30 September 2009

Property managers will be able to compete with the real estate industry in charging letting fees.

By Rob Hosking

The change is included in the Residential Tenancies Amendment Bill which was reported back to the House from the social services select committee earlier this week.

"We consider it unfair to property managers that real estate agents should retain the exclusive right to charge tenants letting fees," says the report.

The changes allow all ‘letting agents' to charge letting fees.

"We believe that this amendment would allow real estate agents and property managers to compete more equally in this area, and, importantly, might result in a decrease in letting fees because of increased competition.

"Some of us also consider that allowing all letting agents to charge letting fees would provide more choice for landlords and tenants by increasing the range of providers of residential letting services."

The select committee report notes that this could possibly result in reduced choice for people unwilling to pay a letting fee, but says "some of us believe that this is outweighed by the advantages of property managers competing with real estate agents."

The original bill, introduced by Labour last year, included a provison for letting fees but confined them to real estate agents.

Labour's position has since changed. It supports property managers and others being allowed to charge letting fees but says the fees should not be paid by tenants.

"We believe this would be most fairly achieved by a prohibition on the charging of letting fees to tenants. ...Labour believes there are many advantages to amending the Act to prohibit anyone from charging a tenant a letting fee," says the Labour minority report.

Instead the landlord should pay, Labour MPs say.

"Landlords choose whether to advertise their rental property with a real estate agent or do so privately, so it seems only fair that those landlords who choose to advertise through a real estate agent should pay the letting fee in the same way that a vendor who sells property pays the agent a commission regardless of the state of the housing market."

Comments from our readers

On 30 September 2009 at 1:49 pm ray clarke said:
The good old NZ brand of Labour Party are not realistic at all. Tenants have the choice of responding to Private or Real Estate Property Managers listings. Far too many Tenants cannot pay thier way and credit checks are compulsory or it turns to custard but Labour would like to have free rents for all.
On 1 October 2009 at 9:26 am ang ryeen said:
Take another slog at the Landlord seems to be the order of the day, week, month, year!. Property investors take on a great risk when borrowing money to provide an accomodation service to those that cannot afford or do not want to buy their own place. Let's look at another way that the playing field could be balanced. The Bank loans must be serviced regardless of wether the landlord has tenants or not. So to keep the money-go-round operating, the banks should pay the letting fee and also hand feed grapes to the tenants and provide them with a goat's milk bath, then everyone would be happy.
On 1 October 2009 at 1:03 pm Anne Doggett said:
Another disincentive for the poor old landlord! Property letting already shows a pretty poor return - and ploys like this will simply drive more landlords out of the market altogether. A shortage of rental property would simply push rents up - and where would the tenants be then?
On 6 October 2009 at 5:36 pm Julian said:
Of course the tenant will pay - higher rents. What planet is labour (ever) on?
On 21 July 2010 at 3:36 pm wayne newsome said:
It's not "landlord slogging" to charge the landlord the letting fee. If the landlord has a contract with an agent to find a tenant then, like any other financial transaction, the party contracting the service should pay, in this case the landlord, it becomes a tax deductible cost to be factored into your business plan. Likewise if the tenant contracts an agent to find them accommodation then they pay. Don't want to pay an agent? Do the work yourself. This is how the economy works. Landlords and agents contracting to charge a third party has a name, extortion.
On 24 August 2011 at 8:02 pm ashnolean.chambers said:
I am 50 years old and own property in several countries. Yet I traeted like carp by barely literate PMs in NZ. Letting fee for exactly what? being treated like shit by a blood-sucking PM? Morally wrong. Outlaw all letting fees and let these bottom-feeding agents justify their fees to LLs. That would soon drive the scum off the pond.
On 23 March 2012 at 2:04 pm Ricky Wilde said:
I agree with previous posts that the person contracting the agents to do the work should pay the fee.
On 17 April 2012 at 8:25 pm sam said:
Exactly. The landlord employed the property manager/real estate company to find them a tenant. Why does a tenant have to pay that fee, that's absolutely ridiculous. I would just tell the company that either the landlord pays the letting fee, or I don't move in. Let my feet do the talking as I turn my back and walk away from a scam.
Commenting is closed

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