Letting fees are prohibited from today after new legislation came into effect, Housing and Urban Development Minister Phil Twyford says.
"Our Government is making life better for renters. Now tenants won't have to worry about letting fees during the busy summer rental season when so many are looking for new homes.
"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.
"Letting fees are unfair on tenants. They have no economic rationale and there is no relationship between the amount of the charge and cost of the services provided.
"Property managers have indicated that they will be charging landlords for their services – this is entirely appropriate as it is a service provided to landlords, not tenants.
"Unlike vulnerable tenants competing for rental properties, landlords are in a position where they can ensure they are paying for exactly the services they are receiving.
"Landlords don't have to pass on these costs and many of them won't. Reserve Bank research shows that in New Zealand rents are driven primarily by supply and demand.
"Banning the charging of letting fees to tenants is a good first step in improving the life of renters while we continue our broader review of the Residential Tenancies Act. This broader review is aimed at giving tenants security of tenure and allowing them to make their house a home, while protecting the rights and interests of landlords.
"Our tenancy laws are antiquated and don't reflect the fact that renting is now a long term reality for many of our families.
"Ultimately the best way to put tenants in a better situation is to increase the supply of housing, and end the shortage that is driving rents up. We're building our way out of the national housing crisis with programmes like KiwiBuild and the Urban Growth Agenda," Phil Twyford said.
