Let­ting fees axed for ren­ters but who picks up bill?

Rotorua Daily Post - - Local News - Amy Di­a­mond

Ur­ban De­vel­op­ment Min­is­ter Phil Twyford says up to $47 mil­lion could be put back into the pock­ets of Kiwi fam­i­lies af­ter leg­is­la­tion has passed ban­ning the charg­ing of let­ting fees to ten­ants but Bay of Plenty prop­erty lead­ers are not con­vinced.

Twyford an­nounced the law change last week and said the ban was a “good first step in im­prov­ing the life of ren­ters” while the Govern­ment re­viewed the Resi- den­tial Ten­an­cies Act.

He said about half of all New Zealan­ders were ren­ters and the ban would make a real dif­fer­ence to strug­gling fam­i­lies.

“There are sig­nif­i­cant costs as­so­ci­ated with mov­ing to a new rental prop­erty, which many fam­i­lies are now forced to do ev­ery year,” he said.

Twyford said let­ting fees were “un­fair” and had no eco­nomic ra­tio­nale as there was no re­la­tion­ship be­tween the amount of the charge and the cost of the ser­vices pro­vided.

“With home own­er­ship rates at a 60-year low, this change recog­nises that we need to take ac­tion now to make rent more af­ford­able so peo­ple can save to buy their own home,” Twyford said.

He said the pro­pos­als in the broader re­view were de­signed to pro­vide ten­ants with se­cu­rity of ten­ure, which al­lowed them to make their house a home, while pro­tect­ing the rights and in­ter­ests of land­lords.

“Ul­ti­mately the best way to put ten­ants in a bet­ter sit­u­a­tion is to in­crease the sup­ply of hous­ing, and end the short­age that is driv­ing rents up. Ki­wiBuild and the Govern­ment’s Ur­ban Growth Agenda are de­signed to in­crease sup­ply,” Twyford said.

But Ro­torua Rentals co-di­rec­tor Richard Evans said ex­tra costs were al­ready be­ing put on Ro­torua ten­ants.

Evans said the Govern­ment’s com­ments that the life of ren­ters would be im­proved were “ridicu­lous”.

“Ex­actly the op­po­site is hap­pen­ing and the Govern­ment doesn’t un­der­stand that.”

He al­ready knew of lo­cal land­lords who had in­creased their rental prices in an­tic­i­pa­tion of the changes.

An ex­am­ple Evans gave was on a $300 a week prop­erty — if rent was in­creased by $10 a week, the let­ting fee would al­ready be cov­ered af­ter 30 weeks.

“In the end, the land­lord will be bet­ter off,” he said.

Ro­torua Prop­erty In­vestors As­so­ci­a­tion pres­i­dent Deb­bie Van Den Broek said as a prop­erty in­vestor, her com­pany, Ren­tAs­sured Ro­torua, worked with long-term ten­ants so she did not ex­pect the law change to have a dras­tic ef­fect.

She said let­ting fees only made up about 13 to 15 per cent rev­enue for the com­pany, but prop­erty man­agers in dif­fer­ent re­gions would be af­fected in dif­fer­ent ways.

Van Den Broek said the way cur­rent let­ting fees were set was “not fair” as a let­ting fee for a Ro­torua rental could be $300 but $1000 on an Auck­land prop­erty. As a land­lord, Van Den Broek said she would al­ways want longterm ten­ants and would not en­cour­age her prop­erty man­ager to turn over ten­ants as it put pres­sure on her prop­erty in the long term. Si­mon An­der­son, chief ex­ec­u­tive of Realty Group, which op­er­ates Eves and Bay­leys, said the change in leg­is­la­tion came ear­lier than he ex­pected but it was an­tic­i­pated.

He said a pos­i­tive to the law change was that ten­ants look­ing to move into a rental would have lower move-in costs.

He said the in­dus­try would ex­pe­ri­ence a tran­si­tion pe­riod where prop­erty man­agers would be work­ing out where this ex­tra cost would go, but it was likely to re­sult in ex­tra costs for ten­ants.

PHOTO / FILE

Ur­ban De­vel­op­ment Min­is­ter Phil Twyford says the change will im­prove the lives of ren­ters.

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