Letting fee refund?

Question from Kate updated on 6th March 2013:

My daughter is at university in the Waikato and paid a letting fee to an agent in December for a new flat, which she was supposed to take over next month. Yesterday she was told the owner had rented out the house and their deal has fallen through. Owner told the agent "so sue me!" Can she get the letting fee back?

Our expert Juliet Robinson responded:

You haven’t indicated whether your daughter had signed a tenancy agreement. Her first point of contact should be the agent to whom she paid the letting fee. Did the agent charge the letting fee after the signing of a tenancy agreement? If your daughter doesn’t have a signed and completed tenancy agreement, she probably has no real chance of recovering from the property owner. In this situation the agent should be refunding the letting fee. It’s a simple matter of the agent not having delivered the service for which your daughter paid. If your daughter had signed a tenancy agreement, and the owner or his/her agent had also signed, then there is a binding agreement. In that case your daughter should take up the owner’s challenge and lodge an application to the Tenancy Tribunal. She should itemise all her costs resulting from the owner’s breach of contract. There are several matters that can be considered by the Tribunal, including your daughter’s actual costs (such as the letting fee) and possible exemplary damages against the owner for his apparent disregard of the contract of tenancy that has been signed. The Tenancy Tribunal is pretty good at finding a fair solution to issues such as this.

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