Rental listings likely to mislead with 'no letting fees' comments: REINZ

Some rental listings are advertising that they don't charge letting fees even though letting fees are banned by law. Photo / Brett Phibbs

Letting fees have just been banned after a long publicity campaign by the Government, but that hasn't stopped property managers and landlords advertising rentals with the slogan: "No Letting Fees".

Property managers One Place had multiple inner city Auckland rentals listed on online sites with the description: "Move in costs are: 4 weeks bond, 1 week rent. NO LETTING FEE."

The advertisements come after the Government banned letting fees last month.

The ban aimed to force property managers to charge landlords for their services rather than tenants.

Given it was now illegal to charge the fees, the recent advertisements had the potential to mislead some renters by implying they were getting a good deal, Real Estate Institute chief executive Bindi Norwell said.

Consumer NZ chief executive Sue Chetwin backed this, saying the ads could incorrectly imply other companies were charging letting fees.

David Faulkner, a consultant to the property management industry with Real iQ, said "there should be no reference to a letting fee on any advert anywhere".

"Everybody now knows unless you've lived under a rock somewhere that property managers can't charge a letting fee - there should be no reference to it".

However, One Place portfolio manager Yves-Louis Dorsemaine said his company was still regularly asked by prospective tenants if they will have to pay letting fees.

It was because of this reason that his company made it clear on its advertisements that no letting fee was needed.

"It's like when we write four weeks of bond," Dorsemaine said.

"Basically everybody knows you have to put four weeks of bond, but even when you write something that is obvious you still have some questions."

A Ministry of Business, Innovation and Employment's Jennifer Sykes said it was good property managers weren't charging letting fees, but they didn't "need to include this detail in their ads".

Robert Whitaker from the Renters United lobby group suspected most of the private landlords' advertisements were genuine mistakes rather than attempts to mislead.

Private landlords who had rented their properties out for many years often cut-and-pasted the text from old advertisement into new ones, he said.

"It is highly likely these ads are cut-and-paste jobs," he said.

"Old listings often get recycled and we've seen a lot in the past that even photos don't get updated."

"Pretty often you see an ad and then go to a place and find it wasn't as accurate as it could be."

Ashley Giles, co-owner of Wendell Property Management, agreed that property managers should remove references to letting fees.

However, like Whitaker, he suspected some property managers had been recycling ads because - in the lead up to the letting fee ban - some companies had advertised "no letting fees" as a way to stand out from other rentals, he said.

"We don't do that - we just summarise the costs," he said. "That is the spirit of the new law."

LETTING FEES

* The ban on letting fees came into effect on December 12

* Property managers had typically charged a letting fee equivalent to one month's rent to cover the costs of their services. However, the new ban aims to instead force property managers to recover their costs from landlords

* The Real Estate Institute and other groups are annoyed ads, saying "no letting fees" misleading imply to renters they are getting a good deal because other companies do charge letting fees

* But One Place Property Management says they write "no letting fees" on their ads to make it clear because they still get asked by renters if they need to pay the fee