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Letting fee paid but lease unsigned, how can I get my letting fee back?

James Dunn asks:
(updated on Thursday, December 04th 2008)

We recently found our ideal property in Ponsonby and paid the letting fee for the property. When we went to sign the lease we asked to have all 4 flatmates names on the lease. The property manager said that this was not possible, as the landlord had specified that only 3 tenants may live in the 3 bedroom house. Although annoying we accepted the decision as it is the landlord's property and at his discretion. But, now the property manager will not return our letting fee! When we made the application we wrote that there would be 3 tenants, but told the property manager there would be 4 if we could find a 4th. At no point did he state that a clause of the tenancy was 3 people max. Is this legal? Thanks for your advice.

Our Experts Answer:

A property manager or landlord who is a registered real estate agent may charge a letting fee for granting a tenancy. As the letting fee is for the grant of the tenancy, if a tenancy has been granted and the tenant changes their mind about accepting the tenancy, then the property manager may still be entitled to charge a letting fee. If you are not able to resolve this matter with the property manager, you may wish to apply to the Tenancy Tribunal. For further advice and information about when a landlord may charge a letting fee and making a Tenancy Tribunal application, you can contact the Department of Building and Housing on 0800 TENANCY (0800 836 262).
The Department of Building and Housing provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.



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