Letting fees

Stuff reports:

Housing Minister Phil Twyford has tabled a bill that would ban landlords from charging the letting fees to tenants.

He was previously considering doing this as part of a wider overhaul of the renting system, but has decided to do it as a stand-alone bill instead.

Landlords can currently charge new tenants for letting the property to them, nominally to cover fees they have paid letting agents. There is no maximum.

Landlords can also charge whatever rent they want. And if they ask for too much, they don’t get tenants.

“Letting fees are an unjustifiable tax on renters” Twyford said, describing them as a method of “gouging renters”.

“I don’t know of any other area of the law where two parties can contract for a provision of services but then charge a third party.”

I’m no fan of letting fees. I agree it seems like a gouge, but how big a problem is it? What percentage of tenancies have a letting fee?

Also is there anything to stop landlords who can’t charge letting fees, just factoring the fee into the weekly rental to compensate? Tenants may even end up paying more – you often have unexpected consequences. In fact MBIE even warns of this in the RIS.