❓ A parliamentary question regarding letting fees charged to landlords after the abolition of tenant letting fees. The Minister clarifies the government's intent and the legal framework, emphasizing the commercial nature of the fees and encouraging landlords to negotiate.
AnsweredQoN 3153Legislative Assembly
QuestionView source ↗
(a) has the Department of Consumer and Employment been made aware of this new charge;
(b) was this the Government’s intent when it abolished a letting fee, to simply transfer the cost from tenants to landlords;
(c) are real estate agents acting within the law when they charge this letting fee of 2 week’s rent to landlords;
(d) can the Minister or the Department advise why the letting fee suddenly doubled;
(e) will the Minister or the Department take action to close this loophole; and
(f) do landlords have any recourse under the law to refuse to pay this letting fee?
(b) was this the Government’s intent when it abolished a letting fee, to simply transfer the cost from tenants to landlords;
(c) are real estate agents acting within the law when they charge this letting fee of 2 week’s rent to landlords;
(d) can the Minister or the Department advise why the letting fee suddenly doubled;
(e) will the Minister or the Department take action to close this loophole; and
(f) do landlords have any recourse under the law to refuse to pay this letting fee?
AnswerView source ↗
Answered
9 April 2008
Responded by
Minister for Consumer Protection
Response time
29 days
(a) Agents charging landlords a letting fee is not new. Prior to the amendment on 5 April 2007, the
Residential Tenancies Act 1987
("the RTA") provided that real estate agents could charge property owners a letting fee set at a maximum amount equivalent to two weeks' rent. Additionally, the Act allowed property owners to subsidise a portion of this cost by requesting that the tenant make a payment to the real estate agent of a maximum amount equivalent to one weeks' rent.
The amendment to the RTA, which was made possible by this government proclaiming amendments that were passed, proclaimed and then deproclaimed by the then Liberal Government in 1995, removed the ability for a property owner or real estate agent to request payment from the tenant for the real estate agent's services in letting the property.
(b) The cost of attracting and selecting new tenants to a rental property is appropriately the responsibility of the owner, not the tenant. The owner is the person who is in the business of letting out the property for financial gain, and the costs of letting property should form part of the investment assessment undertaken by the owner. The Government's intention, when it abolished the charging of letting fees to tenants, was to recognise the inappropriate attribution of costs to the tenant and provide some financial relief to potential tenants who were experiencing extreme financial hardship in entering the Western Australian rental market.
(c) The fee charged to landlords for the management of property by agents is a competitive commercial process, not dictated by law. Landlords are encouraged to shop around to compare fees and negotiate an acceptable fee arrangement.
(d) Previously under the RTA, real estate agents often charged one week's rent to the tenant and one or two weeks' rent to the owner as a letting fee for the premises. Following the amendments, however, some agents have now taken the commercial decision to pass on to owners the full two weeks' rental equivalent as a fee to let the premises. As referred above, landlords should seek to take their business elsewhere or renegotiate fees if they find them unacceptable.
(e) No, there does not appear to be a "loophole".
(f) This is seen to be a contractual matter and the requirement to pay will be determined by the terms of the contract.
Notice: This document is created or edited using unregistered or evaluation copy of rtLib valid for testing or development purposes only. To use it for productive or any other purposes please register it. You may purchase the license on
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Residential Tenancies Act 1987
("the RTA") provided that real estate agents could charge property owners a letting fee set at a maximum amount equivalent to two weeks' rent. Additionally, the Act allowed property owners to subsidise a portion of this cost by requesting that the tenant make a payment to the real estate agent of a maximum amount equivalent to one weeks' rent.
The amendment to the RTA, which was made possible by this government proclaiming amendments that were passed, proclaimed and then deproclaimed by the then Liberal Government in 1995, removed the ability for a property owner or real estate agent to request payment from the tenant for the real estate agent's services in letting the property.
(b) The cost of attracting and selecting new tenants to a rental property is appropriately the responsibility of the owner, not the tenant. The owner is the person who is in the business of letting out the property for financial gain, and the costs of letting property should form part of the investment assessment undertaken by the owner. The Government's intention, when it abolished the charging of letting fees to tenants, was to recognise the inappropriate attribution of costs to the tenant and provide some financial relief to potential tenants who were experiencing extreme financial hardship in entering the Western Australian rental market.
(c) The fee charged to landlords for the management of property by agents is a competitive commercial process, not dictated by law. Landlords are encouraged to shop around to compare fees and negotiate an acceptable fee arrangement.
(d) Previously under the RTA, real estate agents often charged one week's rent to the tenant and one or two weeks' rent to the owner as a letting fee for the premises. Following the amendments, however, some agents have now taken the commercial decision to pass on to owners the full two weeks' rental equivalent as a fee to let the premises. As referred above, landlords should seek to take their business elsewhere or renegotiate fees if they find them unacceptable.
(e) No, there does not appear to be a "loophole".
(f) This is seen to be a contractual matter and the requirement to pay will be determined by the terms of the contract.
Notice: This document is created or edited using unregistered or evaluation copy of rtLib valid for testing or development purposes only. To use it for productive or any other purposes please register it. You may purchase the license on
http://www.rtlib.com
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