Is second letting fee legit?

Question from Katie updated on 2nd July 2014:

Hi, I am renting a four-bedroom townhouse with three other people. We are on a fixed-term contract with our year up soon. Two of my flatmates will move out and I have found two more to replace them. We paid a letting fee when we moved in last year but now the property manager is asking for another letting fee. Is this okay? It seems strange to pay a letting fee every year. It is about $250 each. Thanks.

Our expert Juliet Robinson responded:

It is legitimate for a property manager or letting agent to charge a letting fee at the start of a tenancy. The fee is intended to allow some recovery of costs incurred by the agent in starting your tenancy. However, if you paid a letting fee at the start of your tenancy and you are remaining in the property it is doubtful that you should be required to pay another letting fee. It sounds very much like “key money” which is prohibited by section 17 of the Residential Tenancies Act, “no person shall, without the prior consent of the Tribunal, require the payment of key money in respect of …the grant, continuance, extension, variation or renewal of any tenancy agreement…”.  Further to this, the requiring of key money in these circumstances is an unlawful act with a penalty of up to $1,000. I suggest you discuss this with your landlord.

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