While the Government is conducting a broader review of the Residential Tenancies Act, the first Bill to amend the Act prohibiting charging of a letting fee by property agents and landlords is here.
Housing Minister Phil Twyford believes this change will be “a good step in improving the life of renters”.
What's a letting fee?
A letting fee is a fee normally charged to tenants by property managers and letting agents to cover costs like running property inspections, advertising, viewings, background checks on tenants, liaison with landlords and tenants and putting together the tenancy documents. A letting fee is usually one week's rent + GST.
Why was the Letting Fees Bill introduced?
The government has long believed that this law puts an unnecessary burden on struggling families trying to secure a new place to live. Tenants already have to cover costs for bond (generally equivalent of 4 weeks of rent) and advance rent payments (equivalent of 1 or 2 weeks). Having to pay another charge on top to simply secure a property is often seen unfair.
When does the change come into effect?
The ban will be implemented from December 12.
Does the Letting Fee Ban prohibits agents charging letting fees to landlords?
No. It only prohibits a property manager charging a letting fee or any other fee associated with a tenancy to a tenant.
What if you break the law?
From 12th December charging letting fees to tenants will become an unlawful act. So anyone caught doing it, could be liable for up to $1,000 in exemplary damages.
No. It only prohibits a property manager charging a letting fee or any other fee associated with a tenancy to a tenant.
Interested to know where does it leave landlords? And how you can come out on top? Read our next article
