Fees punishing tenants, MPs told

WELLINGTON: Letting fees are an aberration in the law and are pricing ordinary New Zealanders out of homes, a tenants’ advocate has told MPs.

A select committee yesterday heard submissions on the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill to abolish the fees for new properties.

Housing Minister Phil Twyford previously said the Bill could put up to $47 million into the pockets of New Zealand families each year.

Angela Maynard, of the Tenants’ Protection Association Auckland, told the hearing the costs involved in getting into a rental property were out of control.

She called letting fees an ‘‘aberration in New Zealand law’’ and said there was no other scenario in which two parties contract a service and then charge a third party.

Letting fees are generally one week’s rent plus GST.

Ms Maynard said there was no reason why the fees should be tied to the cost of rent.

‘‘Renters are being punished by these excessive fees and by these extra things that are being put on.

‘‘The letting fee is just one thing that could start to make it better but we hope that eventually all the other fees will eventually be looked at and disallowed,’’ she said.

However, Lisa Gerrard, of the Real Estate Institute of New Zealand, said costs needed to be recovered somehow.

What was needed was more regulation of property managers, who currently did not need to be vetted and were not governed by a code of conduct, she said.

Independent Property Managers Association president Karen Withers agreed that the form of letting fees should be examined, but said that to issue a blanket ban would cause too many problems.

The association’s property managers generally spent six to 10 hours getting a tenant into a new rental property, and they should be paid for that, she said.

Housing Minister Phil Twyford earlier said he hoped the amendment to the Residential Tenancies Act would be passed by the end of the year.