Residential PM Fees

[Giddy]

Hi All,

My Mum is renting in Hamilton and I was chatting to her last night, her fixed term tenancy is coming to an end and she wants to stay on in the house. Her Property Manager has advised that if she wishes to have another fixed term then she must pay a fee of 1/2 weeks rent plus GST.

Further to that I found out that on top of the initial week plus GST she paid to get in to the house they charged her for the credit check costs. I thought the purpose of the week plus GST was to cover administration costs.. I have never heard of a manager charging a tenant so many fees and didn't think they were allowed.

Can anyone advise n this??

Thanks in advance

[Keys]

Legal. (MAMC)

[Perry]

All perfectly legal, as Keys has observed.
The morality of a tenancy extension fee
is another matter, in my view.

[BigDreamer]

I never knew this was legal so I'm very surprised to hear this. 1-2 weeks rent + GST just to extend her tenancy?

[Rosco]

Hi Giddy,

Who is the property manager?

As they are the ones getting this fee, not the landlord.

Sounds a bit steep to me, but the normal letting fee is 1 week, so I suppose they are discounting a bit ?

Ross

[Giddy]

Hi Ross,

I don't actually know who they are, but I don't really see why the need to charge a letting fee when the tenant is already in place and has no plans of going anywhere. In fact my Mum would have preferred not to be on a fixed term if she didn't have to.. her last house she was in over 7 years, only shifted because the LL sold the house.

Oh, did I say she pays her rent directly to the LL and contacts them directly for maintenance.. apparently the wife used to be an REA for the company, only reason they use them.. I guess that grinds me in that my Mum could probably pay a lower rent if the LL's weren't paying 10% to a PM for no reason.

Oh well, whinge over..

Thanks for the comments

[BigDreamer]

Giddy, really sorry to hear about that. I never knew it was legal but I guess you learn something new every day. The LL might be out of town/country and hence the need for a PM.

[Debs]

Just because it's legal doesn't mean it's non-negotiable. I'd be asking for a price reduction in good faith for a responsible long term tenant

[stakeproperty]

It sounds to me like the LL only uses the property management company for the letting, if your Mum contacts the LL directly for maintenance and pays them directly too. Maybe this is the only way they get reimbursed for their letting service (ie drawing up the new tenancy agreement), and maybe only charge 1/2 weeks rent because she is an existing tenant ?

[Nice]

Ask the PM where it shows in the current leasing agreement that a roll-over fee will be charged ? TT doesn't always look favorably upon a PM charging for everything they think they can get away with at the time, ideally the fees will be all spelled out in the initial Lease Agreement.

[Keys]

Doesn't need to be in the tenancy agreement as it is in the RTA.

[Judy001]

When a fixed term expires it is automatically "rolled" over to a periodic lease that is if the tenant is wishing to remain. There should be no further costs to the tenant at all.

[Keys]

Good oh. Just post part of the law. When you've researched it a little better then let us know.

[teamchase]

It sounds to me like the LL only uses the property management company for the letting, if your Mum contacts the LL directly for maintenance and pays them directly too. Maybe this is the only way they get reimbursed for their letting service (ie drawing up the new tenancy agreement), and maybe only charge 1/2 weeks rent because she is an existing tenant ?

I think your right on this, perhaps giddy your mum should be talking to the landlord about this. We act as letting agents, and would never consider charging a fee for renewals, these pms are in my opinion, unethical.

StakeProperty, I love your slogan!

[propertysearch]

All property managers have their charges. As an investor who has property in both NZ and Australia I always find it outrageous that NZ property managers charge so much. We have Dunedin property and 10% seems to be the norm. This is just gouging as none of our Australian property is over 7% and these guys seem to make quite a nice living at that level.
So what is wrong with the NZ property management business? I mean do these guys not realise that landlords have a mortgage to service, high rates, damage cause by tenants as well as times when there are no tenants available and other when one has to deal with (the occasional) bad egg tenant? It defies belief.
So don't be too unhappy with a paltry half a week's rent. A pittance compared to what landlords endure. It (sometimes) makes one want to invest in the share market.