What is a letting fee and why should I pay?

Jo asks:
(updated on Wednesday, April 11th 2007)

I am a student in Wellington, and have just found a new flat to move into for 2007. We are being charged with a "Letting fee" of $135 each. I have never heard of this or had to pay it before, and neither have my friends that I have asked. I am just wondering what it is exactly and why we have to pay it? Thanks, Jo

Our Experts Answer:

The Residential Tenancies Act 1986 allows a landlord to seek a fee or other charge for services rendered by any solicitor or real estate agent relating to the grant or assignment of a tenancy. This fee or charge is often referred to as a ‘letting fee’. Essentially a letting fee is a term and condition of the tenancy. It can only be charged when a solicitor or real estate agent is acting on behalf of the landlord in relation to the grant of the tenancy. The letting fee must also be stated in the tenancy agreement, and if you agree to the tenancy you are agreeing (and would then be required) to pay the letting fee.

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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