‘No letting fees’ ad boast risks law breach

Property managers or landlords who advertise rental properties as having ‘‘no letting fees’’ could be breaching the Fair Trading Act, Consumer NZ says.

Letting fees for tenants were banned by the Government in December, on the grounds it was an unjustifiable tax on tenants.

But some property managers are still using the absence of letting fees as a promotional point.

Auckland agency One Place said it used the phrase ‘‘no letting fees’’ on some of its inner-city property advertisements because many people still did not know they were gone.

‘‘Eighty per cent of our tenants are coming from overseas, and most of them are used to paying some letting fees,’’ the agency’s portfolio manager, Yves-Louis Dorsemaine, said.

Dorsemaine said January was the busiest time of the year and the agency was handling up to 100 inquiries a day.

‘‘Even during the viewings, some people are still asking [about letting fees], even people who are living in New Zealand.’’

But David Faulkner of rental consultancy Property IQ said that argument ‘‘didn’t quite wash’’.

‘‘I just don’t see any reason why you should have to explain. You shouldn’t have it anywhere on the advert,’’ he said.

‘‘There should be no mention of it. It’s done. It’s a good piece of legislation.’’

Consumer NZ agreed, saying that advertising a property as having no letting fees was potentially a breach of consumer law.

‘‘If you’re presenting your business or your product as having a quality that in effect, doesn’t exist in the market – [if] you’re presenting it as being superior because it doesn’t have a particular fee, but in fact these fees aren’t even charged – then that’s potentially misleading and a breach of the Fair Trading Act,’’ Consumer NZ’s head of research, Jessica Wilson, said.

The Real Estate Institute (REINZ) went further and said it could also risk breaching the Advertising Standards Authority’s code, which requires honest representation.

‘‘This has the potential to be misleading,’’ REINZ chief executive Bindi Norwell said.

‘‘So if they do want to put in that no letting fees apply, they need to make it clear to consumers that the entire industry, as part of a legislated change, [is doing it].

‘‘Because otherwise it can imply some companies are doing it and some aren’t.’’