Misled re letting fee?

Question from Tom updated on 26th July 2013:

I recently had a landlord who misled us during the tenancy process by claiming she was the agent for the 'owners' of the property. As we sat in her office about to sign the Tenancy Agreement and hand over the bond money (having already signed an agreement that said we would sign the tenancy agreement or be liable for any costs) she then informed us she infact owned this property. We still signed the agreement and paid the letting fee as we liked the property. Is this legal to charge a letting fee when you are the owner and advertise through Trade Me?

Our expert Alan Bruce responded:

Under the Residential Tenancies Act 1986 (the Act), a fee may be charged for the granting or assigning of a tenancy if that person is a letting agent. This fee can cover finding a property to rent and/or signing up a tenancy agreement. A ‘letting agent’ is defined under the Act as “a person who in the ordinary course of business, acts, or holds themselves out to the public as ready to act, for reward as an agent in respect of the grant or assignment of tenancies, regardless of whether that person carries on any other business”. This means that in order to be considered a ‘letting agent’, a person needs to advertise the fact that they are willing to act on behalf of other people. The most common example of a ‘letting agent’ are property managers who are usually employed by a property management company. However, a letting agent can also be an individual as long as they meet the definition as outlined in the Act. If you consider that the requirement for a letting fee should not have applied to your situation, or if you believe that you have been misled in any way, you should discuss your concerns with the agent / landlord in the first instance to try and reach an agreement. If you are unable to reach an agreement, you may apply to the Tenancy Tribunal for a decision on the matter. To discuss your situation further, or for information and advice about letting fees or applying to the Tenancy Tribunal, you can visit the Ministry of Business, Innovation and Employment, Building and Housing Group’s website (www.dbh.govt.nz), or call 0800 TENANCY (0800 836 262).

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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