With the banning of letting fees coming up soon in NZ, what is your thoughts and ideas on how you will incorporate the charges?

I know most people are talking about charging the owners an annual or monthly Admin Fee, but would that be one week rent (+GST) or would you have a flat fee? Also, how will this affect the PM’s and BDM’s bonus structure, especially if a property is let on behalf of another PM?

I’m curious as to your thoughts and opinions on this matter


Hi @BenR welcome to forums. I’m in Oz so this might be out of my wheelhouse but I’m sure @ashley.giles would have an idea on it.

Hi @BenR

In Australia, it is quite common for the Landlord to pay a Letting Fee and the amount varies from agency to agency, client to client. Sometimes it is one week’s rent plus GST, sometimes it is 1.5 week’s rent plus GST. It can even be a percentage of the annual income. It depends upon what is negotiated between client and agency.

We also quite often charge a monthly administration fee in addition to this. Some agents call it a Technology Fee - there are a few variations. There is also quite a range - I have seen them as low as $2.20 per month, up to $16.50 per month.

The bonus structure also varies form agency to agency. The person who brings in the new business may receive a portion of the Let Fee, or even the full amount. Other agencies pay a percentage of the annual income, once the property is tenanted. Again, it depends upon what has been negotiated between agency and BDM/PM.

I know this is a big change for the industry in New Zealand and it is going to take a little while for everyone to get their heads around it.

For new business moving forward, I would start to introduce this as soon as possible You will need to practice your dialogue around this. Some of your competitors’ will not charge the Let Fee because it will be simply too hard for them to get their head around - just like they reduce their fees easily too. Your negotiation skills are really going to come into play :slightly_smiling_face:

For current clients, you may need to be more careful. You are going to need new authorities signed for this and it may be that you start the conversation with owners now but roll it out over the next 12 months in a staggered approach.

The PM’s are going to need training around this, as well as BDM’s. Believing in the value you are providing around the leasing process is the first step.

I am not sure what you mean about the property being let on behalf of another PM - is this within the agency?

Hope this helps a little.

Thanks, @terrihandy
I really appreciate your feedback, it is quite interesting to see how it works around the world.

It sure will take us a while to get our head around things, but I’m sure we will figure something out.

And yes, when a PM is on leave and another PM lets a property on their behalf. we have been giving 25% of the cut to the “Relief” PM. I am just wondering how you would keep track, especially if we were to be charging an annual/monthly fee.




HI @BenR welcome to the forums!

Its a good question, firstly were still not quite there… I am holding out hope that the National Party will buy us a little more time! Haha… But it will get through at some stage I am sure, there is too much media pressure for it not to.

This cost centre has been mis-placed to the tenants in NZ for too long if you compare to the rest of the world. The way this will work is that all agencies, (like Wendell’s is planning to do) will be to either incorporate the costs of letting into a higher fixed fee (so moving from 8.5% + GST to a 10% + GST flat fee for all costs like maintenance, admin, inspections etc) or simply setting a “Letting & Marketing” cost for landlords at the time of re-letting.

The owners can choose how they would like to structure it, but ultimately it comes out even for the agency. (obvously for asset value the higher management fees works in our favour!)

The flip side of this (if I can continue my slight rant) is that ultimately the landlords will look to pass on their higher management costs to the tenants, so rents will go up slightly to reflect this over time. So, the point of it is kind of missed… but hey, what would politicians know about this! Haha…


Just changed my description of the admin fee to Technology Fee.

I get asked all the time ‘Why are you charging me postage when you email the statement?’

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The lett fee you charge is that to the tenant or the owner?

@Colleen In New Zealand, it has been common practice to charge the incoming tenant, a Letting Fee. Legislation is coming in soon making that practice illegal. Understandably, this is going to shake things up a little regarding income for agencies and investors.

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@BenR I would say your incentive structure will have to change around this, otherwise, it is going to become very complicated. Also, if everyone is having to assist with providing “relief” when someone is away, doesn’t it all even out in the wash?

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@BenR where did you guys land? Starts next week… Are you taking the increase in % approach, the $20 flat fee a month approach or the Landlord pay when re-let approach…

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