Property managers hit renters with 'new tenant fee'

Wellington renter Daniela has been in and out of rental properties - and has been with various property managers, with both good and bad experiences. Photo / 123RF

By RNZ's Jonathan Mitchell

Fees being charged by property management companies when rental tenants get a new flatmate are being questioned.

From December 2018, letting fees have been illegal, but a post on Facebook has got people stirred up over claims a young student in Wellington was being charged a new tenant fee by Quinovic.

Crippling letting fees were given the boot over a year ago, meaning new tenants don't have to make a payment to their agent or property management company for their services.

The post on VicDeals says a student was being asked to pay $250 as a "new tenant fee" by Quinovic.

Quinovic said in a statement that the "new tenant fee", quoted in the Facebook post, was allowed under section 44 of the Residential Tenancies Act.

It said the Facebook post was misleading to refer to letting fees.

However, Renters United spokesperson Robert Whitaker said he was suspicious about that charge.

"We've heard stories about a number of property managers - management companies charging fees - or reorganising their fees... so obviously what has happened has been that lots of property management companies have switched the fee to being charged to the landlord rather than the tenant," Whitaker said.

"So when the letting fees went away - they instead introduced some fees that they charged to landlords for the services of letting and stuff like that," he said.

Wellington renter Daniela has been in and out of rental properties - and has been with various property managers, with both good and bad experiences.

She said she recently wanted to break a tenancy early, but was being asked to pay extra costs that were not in the contract she signed.

"[It was] $200 as originally agreed, plus you need to pay a letting fee which will be one week's rent, plus GST... plus we are actually going to increase your rent because we want to have a higher rent for the next tenant," she said.

Daniela said she got legal advice - and that only opened her eyes to the struggle many other renters face.

"And she [lawyer] just laughed her head off because she said 'everybody is doing it - there are so many property management agencies out there - they are all doing it'," she said.

Daniela said she had managed to resolve the issue without having to pay those extra costs.

In a statement, Tenancy Services said landlords and property managers could request payments when new tenants moved in, or people were subletting, or ending fixed-term contracts early.

However, it said that these costs must be "reasonable".

Renters United urged people to question their property management company if charges being demanded didn't seem fair.