Letting fees banned on rentals

It was only a matter of time.  The government takes another swipe at nasty landlords.  This from StuffQuote:

Tenants will no longer have to pay letting fees to agents and landlords, after Parliament voted to ban the practice.

Housing and Urban Development Minister Phil Twyford estimated the change could prevent the handover of up to $47 million in a payments he said were “unfair” and had “no economic rationale”.  End of quote.

No economic rationale?  What a stupid statement.  The letting agents provide a service to both tenants and landlords.  That service costs time and therefore money to provide, which is passed on to the person letting the property.  There you go Phil, that’s the ‘economic rationale’.  Quote:

“This will 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.

“When moving into a new rental property, tenants can face up to four weeks’ bond, two weeks’ rent in advance – and one weeks’ rent as a letting fee – in addition to moving costs,” he said.[…]  End of quote.

It sure will make a difference.  Rents will go up, it’s as simple as that.  The socialist government does not understand that the cost of using a letting agency doesn’t just disappear, it will simply move. The only place it can go is into the rental cost.

I also dislike the spin that is put on the ‘four weeks bond, two weeks rent in advance’ rhetoric.  It’s made out to be an upfront cost each time a tenant moves, which is simply not true.  Provided a tenant has left their previous property in good order, the bond can be transferred, and the rental paid in advance at the beginning of a tenancy which means that the last two weeks of the rental are effectively free.  This allows the tenant to provision for the two weeks in advance at the new property.  Yes, there may be some differences and extra costs, but it’s simply not the six-week chunk of money that is pimped to garner more sympathy for the poor hard done by tenants. Of course, this is only true for good tenants.  Scumbag tenants that have rent arrears or leave the property in a mess and forfeit their bond will have to stump up the full amount each new tenancy, but I have no sympathy for those tenants.  Quote:

[…] “Letting fees covered  property inspections, advertising, viewings, background checks on tenants, liaison with landlords and processing the tenancy agreement,” Bindi Norwell, REINZ chief executive, said.

“So actually, they do quite a lot of work. So someone has got to pay for that.”

National has maintained the argument that getting rid of letting fees would drive up rents.  End of quote.

Correct, nothing is free, and banning letting fees for renters will just move the one-off cost to an increment on the weekly rental cost.


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