Letting Fees bill passes final reading, will be gone by Xmas
The Prohibiting Letting Fees bill has passed its final reading in parliament today.
The bill, which passed its third reading with support from Labour, NZ First and the Greens, will make charging a tenant a letting fee an unlawful act.
A letting fee is usually one week’s rent+GST and will save tenants in New Zealand up to $47 million per year.
The law will come into effect on December 12, in time for the busy letting season of January and February.
The maximum penalty for property managers who attempt to charge a letting fee after this date will be $1000 exemplary damages.
Landlords or property managers will still be able to seek reimbursement from a tenant for expenses reasonably incurred as a result of a tenant assigning, subletting, or lease breaks.
In a survey of 500 property managers, conducted by tenancy.co.nz, 70% of property managers said they would charge the owner a letting fee instead, 12% said they would increase their management fee and 18% said they would charge the landlord half a week letting fee and a slightly increased management fee.
National and Act opposed the bill, saying it would see higher rents in the long-term and may force some landlords to quit the residential rental market.