A property management company plans to charge each new tenant a letting fee equal to one week's rent. Is this allowed?
Correct Answer
D) No; requiring a tenant to pay a letting fee is prohibited.
Section 17A says no letting agent or other person may require a tenant to pay a letting fee. It is an unlawful act, and a landlord who breaches it commits an infringement offence. Reasonable expenses for consenting to an assignment or sublease are recoverable separately under s 44A.
Why This Is the Correct Answer
Section 17A bans charging tenants letting fees.
Why the Other Options Are Wrong
Option A: Yes, provided the fee is disclosed in the advertisement before viewings.
Disclosure does not help; s 17A bans requiring any letting fee from a tenant.
Option B: Yes, if the company is licensed under the Real Estate Agents Act 2008.
A licence under the REAA does not override the letting fee ban in the RTA.
Option C: No, unless the fee is capped at one week's rent plus GST.
The old one-week-plus-GST practice ended; letting fees to tenants are banned outright.
Background Knowledge for Property Management
Source: https://www.legislation.govt.nz/act/public/1986/0120/latest/whole.html
Exam Tip for Property Management
Letting fees are paid by the landlord, never by the tenant.
Common Mistakes to Avoid on Property Management Questions
- •Assuming the historic one-week-plus-GST letting fee is still allowed.
More Property Management Questions
How long does a landlord have to lodge a bond with Tenancy Services after receiving it from a tenant?
Which of the following is a mandatory requirement for all rental properties under the Healthy Homes standards?
A periodic tenancy began 8 months ago and the rent has never been raised. If the landlord gives written notice today, when is the earliest a rent increase can take effect?
A property manager discovers a tenant has been subletting rooms without permission for 6 months, generating significant income. The head tenant is otherwise compliant and rent is current. What factors would most influence the Tenancy Tribunal's decision on termination?
Under the Residential Tenancies Act 1986, what is the most a landlord can charge as a general bond (not counting any separate pet bond)?
- → Which of the following is NOT a mandatory requirement for tenancy agreements under the Residential Tenancies Act?
- → How much notice must a landlord give a tenant before conducting a routine property inspection?
- → A tenant has given 21 days' notice to terminate a periodic tenancy but wants to leave 5 days early. What must happen for this to be legally acceptable?
- → A tenant claims bond refund for $1,200 but the landlord disputes $400 for carpet cleaning. The tenant disagrees and applies to the Tenancy Tribunal. What happens to the bond during this dispute?
- → How often may a landlord carry out routine inspections during a tenancy?
- → A landlord wants to increase rent for a periodic tenancy. What is the minimum notice period they must give?
- → During a property inspection, a property manager discovers the tenant has installed a spa pool without permission. What is the most appropriate first step?
- → By what date did all private rental properties in New Zealand have to comply with the healthy homes standards?
- → A property manager conducts an inspection and finds the tenant has installed a heat pump without permission. The tenancy agreement prohibits alterations without consent. What can the landlord legally require?
- → During a property inspection, a landlord notices the tenant has changed the locks. Under what circumstances is this legally permitted?
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