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May 21, 2018 | by  | in News |
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Taking On Letting Fees

VUWSA is currently rallying behind the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill, which was introduced by Housing Minister Phil Twyford on 22 March 2018. VUWSA is running an online crowdsourced submission box on their website; all contributions will be added to a collective VUWSA submission to the Select Committee dealing with the proposed Bill.

“Letting fees are an unjustifiable tax on renters,” said Twyford as he announced the Bill.

VUWSA President Marlon Drake said “The impact of letting fees on our students means a lack of mobility, and a loss of money which could be better spent… they do more harm than good”.

Under the Residential Tenancies Act 1986, solicitors or letting agents are able to charge “letting fees” to assign a tenancy. A letting fee is extra money that people pay for the property managers’ time spent holding open homes, interviewing tenants, and preparing tenancy agreements. The fee is normally one week’s rent plus GST, and cannot be charged to renewing leases.

Massey University research has shown letting fees to increase inequity. This is because higher-income tenants can afford to selectively choose properties that don’t have letting fees, whereas lower-income tenants tend to move more which would result in them paying more letting fees.

Some commentators have speculated that banning letting fees will cause rents to rise. However, when Scotland banned letting fees in 2012, only two percent of landlords increased rent as a result of the letting fee ban, according to a survey.

If you want your opinion to be heard, make a submission at the VUWSA website www.vuwsa.org.nz/rta

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