Letting services under the spotlight

Cabinet will invite the Real Estate Agents Authority when it is formed to monitor letting services of commercial property managers, with a view to report back on the issue in February 2011, according to former Associate Justice Minister Richard Worth's paper on the review of regulation of property managers.

Worth did not consider it appropriate to deregulate commercial letting services, despite the Real Estate Agents Act allowing residential property managers to charge the fee to property owners.

The door has been left open for residential property managers to charge tenants letting fees, and the issue will be discussed when the Social Services Select Committee reviews the Residential Tenancies Amendment Bill.

"That was in response to concerns that allowing real estate agents, but not other property managers, to charge a letting fee to residential tenants gives real estate agents preferential treatment" and this was inconsistent with the direction of the new act, Worth said in his paper.