Letting fee refund

Question from james updated on 19th October 2018:

I agreed to a property, signed a tenancy application and paid the amount for the letting fee. Then the landlord didn't have the property anymore but rented it to someone else. Should I be entitled to a full refund?

Our expert Jennifer Sykes responded:

A letting fee covers the cost of putting a tenancy in place. This can include covering the cost and time involved for the letting agent for holding open homes, reviewing applications from prospective tenants, preparing tenancy agreements and conducting the initial property inspection. Letting fees can vary, but are normally one week’s rent plus GST. The tenancy agreement must state whether there is a letting fee. 

If the tenant signs or agrees to the tenancy, they must pay the letting fee. If a tenant is offered a tenancy by a landlord, pays a letting fee and then the property is no longer available, then the letting fee should be refunded. However, if a tenant signs a tenancy agreement and then for whatever reason changes their mind, they may not be entitled to a refund of the letting fee.

For more on the rights and responsibilities of landlords and tenants, go to www.tenancy.govt.nz or subscribe to our e-newsletter Tenancy Matters at www.tenancy.govt.nz/subscribe.

The Ministry of Business, Innovation and Employment provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.

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