Ban on Letting Fees

[Viking]

Go to fixed term tenancies and add to the rent. Charge weekly administration fee.
After all that's what tenancy managers do. Administer the tenancy.

[Keys]

(2)
Nothing in subsection (1) limits or affects section 44(5) (which entitles a landlord to recover reasonable expenses on consenting to the tenant’s assigning, subletting, or parting with possession of the premises).

Just purchased a couple of stop watches from Ali Express. About $20. Will track the time involved in doing a few assigning or re letting scenarios. I have a $/hour figure in mind. Anyone got a suggestion on what they would charge (+GST) per hour?

[Nice]

My rate is increasing each month as the legislative requirements I have to abide by increase!

[Perry]

New section 17A inserted (Requiring letting fee prohibited)

After section 17, insert: 17A Requiring letting fee prohibited

(1) No letting agent or other person may require a tenant to pay a letting fee.

(2) Nothing in subsection (1) limits or affects section 44(5) (which entitles a landlord to recover reasonable expenses on consenting to the tenant’s assigning, subletting, or parting with possession of the premises).

(3) Any requirement to pay a letting fee in contravention of subsection (1) is an unlawful act.

Maybe we need to then charge a fee at the end of the Tenancy. Vacation Fee. Be nice to go to Fiji for a week. lol

What about solicitor's fees?

I thought they were to be excluded, too.

But that wording does not appear to include them.

What am I missing?

[Keys]

(1) no letting agent or other person may require a tenant to pay a letting fee.

(maalmfc).

[Perry]

But is a letting fee a solicitor's fee when the solicitor's fee is for time and costs in executing tenancy documents?

[flyernzl]

Just purchased a couple of stop watches from Ali Express. About $20. Will track the time involved in doing a few assigning or re letting scenarios. I have a $/hour figure in mind. Anyone got a suggestion on what they would charge (+GST) per hour?

B&T estimate three hours to process each new tenant - I assume that this does not include any time spent on the unsuccessful applicants.

$125/hr +GST sounds OK to me.

[artemis]

B&T estimate three hours to process each new tenant - I assume that this does not include any time spent on the unsuccessful applicants.

$125/hr +GST sounds OK to me.

Is that 3 hour figure for a new tenancy? The Bill allows for recovery of 'reasonable expenses on consenting to the tenant’s assigning, subletting, or parting with possession of the premises'. I assume this is what Keys plans to measure. Also I assume that 'assigning' includes change of tenants. Will there be some guidance on who should pay the expenses - the assignor tenant or the assignee tenant, similarly with subletting. Would this need to be included in tenancy agreements, including the standard MBIE ones. If not included is there an obligation on tenants to pay?

What expenses would tenants be expected to pay when parting with premises, and can these be deducted from bonds?

Stopwatch sounds like a plan for time (or use the lawyer 6 minutes) but costs should also be included - mileage, photocopying etc. Will each and every PM need to determine expenses for each type of activity - or indeed each instance of an assignment etc - and be prepared to justify it in the TT?

The Bill just says 'reasonable' not 'actual and reasonable'. Who decides what is reasonable?

PMs and also owners could actually do OK under this Bill, since tenants will be paying, especially if there is a lot of 'change of tenant' activity to charge to tenants. Not uncommon in group tenant situations, and would be at least 2 hours to process a new tenant and say 1 hour to process the leaving tenant. A gift that keeps on giving.

Unintended consequences. And a whole bunch of TT applications ...

Suggest submitters to the Select Committee do not say too much about the unintended consequences lest the Bill becomes more prescriptive / restrictive in this area. Seems little doubt something will be passed.

It would be useful for, say, the PIF to contact a sister organisation in Scotland to see how they recover costs.

[Keys]

I intend to take note of a dozen or so changes. This will include travel time and car fees for all viewings, all cell calls to prospects, all time in answering emails, printing and stationery etc. You all know the drill. After a dozen or so I will have a good idea of actual time involved.

[Sharon]

I get that letting a property time consuming even in periods strong demand. Probable the Bill or Select Committee might focus on who benefits and why. Obvious situations might be tenant is still responsible when breaking an FTT & the hidden work involved in areas like that. Bonds for winz clients another - lots of mucking around there.
No doubt tenant lobby groups will advocate the cost of preparing documents, advertising and time spent by a PM is a vendor expense yet remain silent on overhead expenses required to run an office.
Figure quoted at $125 per hour, is that an Auckland PM rate? If so the commission based structure owners pay a PM represents good value.

[flyernzl]

Figure quoted at $125 per hour, is that an Auckland PM rate? If so the commission based structure owners pay a PM represents good value.

I have no idea.
It just sounded a reasonable figure for this sort of work to me.