Tenancy "option fee"

[TomW]

Make sure you are charging both a letting fee and option fee (total of 2 weeks rent) when giving potential tenant to move in (before a tenancy is signed)

More info: https://www.tenancy.govt.nz/rent-bon...and-key-money/

[Learning]

TomW did you read the info on the page you linked to? It clearly said that only agents can charge a letting fee and a key fee must be refunded or used as rent if the tenancy goes ahead.

[Keys]

Learning. Did you read the definition of "letting agent"?

[Learning]

Learning. Did you read the definition of "letting agent"?

"An agent is someone who has the authority to act for someone else. They take on the responsibilities of that person under the tenancy agreement.

A letting agent is a person who makes a living from renting or managing properties. They are usually a person who works for a property management company.

Some examples of people who aren’t usually letting agents are:

private landlords renting out their own properties (unless they manage properties for other landlords)
A person who is part of a trust (a trustee or beneficiary of a trust)
A person who is the director of a company that owns a rental property."

My understanding of that is a private LL can't be a letting agent for their own properties unless they are the agent for others as well. My guess is that would exclude the majority of private LLs.

[Perry]

Some examples of people who aren’t usually letting agents are:

private landlords renting out their own properties (unless they manage properties for other landlords)
A person who is part of a trust (a trustee or beneficiary of a trust)
A person who is the director of a company that owns a rental property."

Note the "aren’t usually" qualifier.

What if the letting agent is a working coy dir of a PM company that manages properties of other entities, and it just so happens that the same coy dir owns one of the properties that the PM company is managing?

I suspect that's not uncommon.

Glenn has made comments which would indicate he was in that position.

[Keys]

letting agent, in relation to a tenancy, means a person who, in the ordinary course of business, acts, or who holds himself or herself out to the public as ready to act, for reward as an agent in respect of the grant or assignment of tenancies, whether or not that person carries on any other business

My emphasis.

[eri]

key's point

which he has made before

is that if you advertise as a property manager for others

even if you are currently managing only your own properties

it could be legally argued that you are entiled to charge a letting fee

[Learning]

I'm not sure that's within the intended sprit of the act and another excuse for a tenant leaning adjudicator to side against a private LL.

[eri]

quite probably

[Perry]

I'm not sure that's within the intended spirit of the act . . .

That's one helluva can of worms you opened, there. The Act already goes into that sort of thing, to a degree.

85 Manner in which jurisdiction is to be exercised

(1) Subject to the provisions of this Act and of any regulations made under this Act, the Tribunal shall exercise its jurisdiction in a manner that is most likely to ensure the fair and expeditious resolution of disputes between landlords and tenants of residential premises to which this Act applies.
(2) The Tribunal shall determine each dispute according to the general principles of the law relating to the matter and the substantial merits and justice of the case, but shall not be bound to give effect to strict legal rights or obligations or to legal forms or technicalities.

As I've noted before, tenants don't have to comply with the RTA's strict legal rights, or obligations, or technicalities, but heaven help a LL who does not.

[Wayne]

I'm not sure that's within the intended sprit of the act and another excuse for a tenant leaning adjudicator to side against a private LL.

Which bit is not in the spirit of the Act?
The letting fee has been discussed and there are conditions for you to be able to claim it.
The Option Fee is to be refunded or used towards the 1st weeks rent if they take the property.
I presume that you keep it if they don't take the property but I'd suspect you would have trouble getting most people to pay it in the 1st place.

[Keys]

Option fee.

Currently off to the TT for the third time in about 6 years after a tenant did not continue with the formal offer after they signed it. We're claiming three weeks rent in lieu of notice (subject to the property renting or not) as well as the letting fee. This tenant will squeal as, when I told her there will be consequences, I was told to treat her like an adult and not a child.