Questionable fees

Question from Kaylee updated on 2nd March 2020:

I am breaking a fixed term tenancy agreement. I understand from prior questions that I am responsible for paying any costs incurred by the property management company. However, my property manager asked me to advertise on my social media and I did this as well as showing people through the house. I then handed out rental application forms. Approximately 20 people returned their forms.

I have now requested an itemised bill to show me what the fee is for that I am paying. The response was now that as they can not charge the incoming tenant a "letting fee" they are passing this onto me in the form of a break lease fee for their time. The fee is $897. That's a lot - considering I have done all the foot work. Is this allowed?

Our expert Jennifer Sykes responded:

Landlords or their agents can’t charge letting fees to tenants. This includes any charges to renew or extend a tenancy. The landlord may charge a fee for ending the fixed-term early. These fees should only be their actual and reasonable costs, for example, the cost to advertise for new tenants. A letting fee is not considered an actual or reasonable cost to pass on, given that letting fees are no longer lawful.

Fixed-term tenancies can only be changed if the landlord and all the tenants agree. Any agreement should be in writing and should include what’s been agreed to. Both the landlord and tenants should keep a copy of this.

For more information on ending a fixed-term early, go to tenancy.govt.nz/ending-a-tenancy/ending-a-fixed-term-early. You can also subscribe to our e-newsletter Tenancy Matters here

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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