Regulate property managers - REINZ

Wednesday 23 May 2018

Regulating the property management industry would help renters more than banning letting fees will, REINZ argues as submissions on the proposed ban close.

By Miriam Bell

Earlier this year, Housing Minister Phil Twyford introduced a Bill into Parliament which will ban the charging of letting fees to tenants.

Twyford says letting fees are unfair and an “unjustifiable tax on renters” and believes the move will make a real difference to struggling families as letting fees can amount to a significant cost.

“Banning the charging of letting fees to tenants is a good first step in improving the life of renters, while we continue our broader review of the Residential Tenancies Act.”

The submission period on the Bill finishes today and, as it does, REINZ has come out in opposition to the proposed ban.

REINZ chief executive Bindi Nowell says a more effective way of delivering fairness and affordability in the rental market would be to regulate the property management industry.

“While a proposed ban on letting fees would reduce upfront fees for tenants, it is highly likely that those fees may simply be charged to landlords and then recuperated through increased rent.

“This would contradict the purpose of the ban which is to reduce cost and increase fairness for tenants.”

At the moment, there are no rules governing the handling of rental payments and no professional standards that property managers must meet - unless they are also a licensed real estate agent.

Norwell says anyone can become a property manager which means there is no consistent accountability and protections in place across the industry.

“There are some fantastic property managers out there who have high ethical standards and adhere to the REINZ Code of Agency Practice, but this is unfortunately undermined by others who do not have the same standards of ethics.

“This means that renters – who include some of our more vulnerable members of society – could be taken advantage of and their money isn’t protected the way it should be.”

For this reason, Norwell says that if the Government really wants to protect tenants, it should take the opportunity to include regulation of property managers as part of its wider review of the RTA.

Banning letting fees isn’t a popular proposal with many in the property industry, with many arguing it will, ultimately, impact negatively on tenants.

At Home Property Management’s Gregory Young has said the ban could result in higher property management costs that will be passed on to tenants.

“Taking away a one-off letting fee will simply end up with extra costs being added to the weekly rent. And that is likely to result in tenants’ paying more than they would have with a one-off fee.

“So if the government wants to save tenants money by doing this, it won’t. The cost is likely to come back on tenants.”

Meanwhile, the NZ Property Investors Federation is against letting fees being banned because it believes tenants should be able to choose whether or not they pay for the extra service provided.

Read more:

Letting fees to go

Rethink letting fees ban 

Comments from our readers

No comments yet

Sign In / Register to add your comment

Property News

Don’t count on a market upturn

It’s been a spectacular run for the market but this property cycle has done its dash and recent positive developments aren’t likely to cause a major upturn, one top economist says.

House Prices

Gloomy expectations around Super City

Auckland house price expectations have turned negative for the first time since 2009 with a new ASB survey turning in a gloomy outlook on the market.

Commercial

Changing world, changing property market

Technology and changes to the way people work are set to transform the commercial property sector and investors need to be attuned to these developments.

Mortgages

Investor lending weak in March

The latest Reserve Bank lending data reveals investors borrowed more than $1 billion in March, the highest figure since November, but a 10% fall on the same period last year.

Site by PHP Developer