Legislation to ban letting fees

[Don't believe the Hype]

Well said.

in effect the PM will get to double dip. They will put up their fee (%) to compensate this fee removal effectively recovering the fee from current rent. The LL will put up the rent to recover the fee - of which the PM will get a cut. The LL is unaffected at best, the PM will be better off. The tenant... we’ll ones that move regularly could be better off but long term stable tenants will pay more.

[Perry]

Dhil Twitford has some gall, claiming "no economic rationale."

The same could be said for almost all his RTA policies.

Candidly, I can't see any economic rationale is paying him, either.

[Don't believe the Hype]

I was at the Porirua redevelopment announcement yesterday. He didn’t get up to speak. That was probably the best result for him.

[Keys]

Phil Twyford estimated the change could prevent the handover of up to $47 million in a payments

Silly bugger will miss out on a little over $7 mil in GST as a result.

[Nick G]

All rents will increase by 3-4% and values over the next year as that all filters through because rents impact values. But this stuff is gradual. Nobody's rent will go up next week.

I think Phil just added a large NW increase for many investors in a bizarre way.

[PC]

But at least there was extensive "consultation" and "fairness" about the decision.
Not just tax, ban and more tax.

[Don't believe the Hype]

Hey Keys - What about an application fee? That’s fairer? If you want to apply for a tenancy you can cover the cost of your application.

[Keys]

How is this. A convenience fee?

Those tenants who want to view the property inside normal business hours get to view it.

Those who want after hours or weekend viewings pay a fee for the privilege. After all, it is for them.

[flyernzl]

As with most Govt fiddling, good tenants will pay more and poor tenants will pay less.

Reasoning:
Assume two separate tenants, A and B

Tenant A changes from rental frequently, probably because they live a transient lifestyle, get evicted, or have an unstable work history.

Tenant B gets a rental, settles in and stays there for 10 years.

Assuming that they both get their rentals through property manager, they pay a letting fee for each rental they get.
Working with a standard rent of $400 p/wk, that is a letting fee of ($400 + GST ) $460 and say that tenant A moves twice per year.

So, with the current system, over ten years, tenant A pays a total of ($460 x 2 x 10) $9200 in letting fees while tenant B pays just the one $460.

Now if letting fees are banned, the PMs costs will now be passed on to the landlord who will factor this into his cost structure and, over time, increase rents to cover this.

Assume that he raises the rent by ($460 divided by 50 weeks ) $9 per week to cover this extra expense.

Therefore both of these tenants will now pay an extra ($9 x50 x 10) $4500 in rent over the ten year period.

So feckless tenant A is better off by ($9200 - $4500) $4700

While good tenant B is worse off by ($4500 - $460) $4040

As I say, good for bad tenants and bad for good tenants.

[Don't believe the Hype]

How is this. A convenience fee?

Those tenants who want to view the property inside normal business hours get to view it.

Those who want after hours or weekend viewings pay a fee for the privilege. After all, it is for them.

Keys I think you’re on to something - I can’t see an outside of business hours fee for service being a problem. As a landlord may be required to contract the letting service but shouldn’t have to incur an out of normal hours charge.

[Don't believe the Hype]

Taking this idea a bit further, as a landlord I’d be prepared to pay for a PM to host a 1hr open home for prospective tenants to attend. If they want to view outside that open home they can pay the cost of the PM’s time.

[Perry]

An extra percentage on the weekly rent that's retained by the PM?

[Nick G]

Per my PM, I think he'd like people to pay a fee to arrange a viewing that is refunded if they show up.

[Sharon]

In terms of breaking a FTT wondering what TT regard as a reasonable hourly rate of a PMs time. Know of one who states $70 per hour

[Perry]

Anyone seen / read the actual legislation?

Does it exclude a lawyer's fee, as well as PMs?

Section 13A (m)