Letting fee back when tenancy didn't go ahead?

Bob asks:
(updated on Wednesday, August 14th 2013)

I recently paid a property manager a letting fee for a property. The fee was accepted but due to other circumstances, the lease could not be signed by myself and I indicated this to the property manager. No paperwork has ever been signed and the agent indicates that should the property not be rented, I am liable for the rent. Is this right? Also, is it possible for me to get part of the letting fee back?

Our Experts Answer:

You haven’t said what circumstances prevented the lease being signed. Did you change your mind? Had you committed yourself to pay the agent’s letting fee even though you didn’t go through with the tenancy agreement? I’m curious also that you say the agent believes you’re liable for rent if another tenant is not found. It seems that the agent believes you have a tenancy agreement that binds you. Are you sure you haven’t signed something? The Residential Tenancies Act requires that a tenancy agreement must be in writing and signed by the landlord and the tenant. If you have not signed a tenancy agreement, then it is probable that you don’t have a tenancy. That being the case, it is hard to see how you can be liable for rent. Discuss these points with the property manager and I’m sure you will be able to sort out your differences.

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