Real Estate Institute: Help renters by regulating property managers
New Zealand’s Real Estate Institute says the government should regulate property managers, not focus on banning letting fees, if it wants to help renters.
Submissions close on Wednesday on the proposal to stop landlords charging letting fees to tenants who want to secure a property.
These fees are often equal to a week’s rent, plus GST.
But Real Estate Institute chief executive Bindi Norwell said while a ban on letting fees might help renters initially, a better long-term impact would be achieved by introducing appropriate standards for property managers and better consumer protections.
“If the minister wants to deliver fairness and affordability in the rental market a more effective way of doing this would be to regulate the property management industry,” she said.
“Whilst a proposed ban on letting fees would reduce upfront fees for tenants, it is highly likely that those fees may simply be charged to landlords and then recuperated through increased rent. This would contradict the purpose of the ban which is to reduce cost and increase fairness for tenants.”
There are no rules for how rent payments should be handled and no professional standards for property managers.
“There are some fantastic property managers out there who have high ethical standards and adhere to the REINZ Code of Agency Practice, but this is unfortunately undermined by others who do not have the same standards of ethics,” Norwell said.
“At the moment anyone can become a property manager meaning there is no consistent accountability and protections in place across the industry such as holding money in a trust account, having the appropriate insurance in place to operate in the industry, having a dispute resolution process in place or regulatory compliance being adhered to. This means that renters – who include some of our more vulnerable members of society – could be taken advantage of and their money isn’t protected the way it should be.
“Therefore, if the government really wants to protect tenants, it should take the opportunity while reviewing the wider Residential Tenancies Amendment Act and include regulation of property managers as part of that.”
