Greens ease financial burden for prospective tenants

Submitted by Louise Sales on Thu, 24/11/2011 - 11:58

In a small step to improve rental conditions, Hon Lynn MacLaren MLC, the WA Greens housing spokesperson, has successfully amended the Residential Tenancies Amendment Bill 2011 so that option fees paid by prospective tenants must be refunded within 7 days if their application is rejected. Option fees are commonly charged by real estate agents and are intended to cover the cost of finding another tenant if a prospective tenant subsequently turns down the property. The amendment was successfully moved in the Legislative Council last night and must now pass the Legislative Assembly.

“This will help reduce the risk of homelessness among lower income prospective tenants who may struggle to pay multiple option fees,” said Ms MacLaren.

“Many tenants can’t afford to apply for another property until their outstanding option fees have been refunded. This amendment will ease the financial burden on prospective tenants and help them to secure a place more quickly,” added Ms MacLaren.

The amendment was recommended by the Tenants Advice Service in their submission to the Bill.

Ms MacLaren also moved to amend the Bill to scrap option fees altogether, arguing, “in a tight rental market there is no shortage of prospective tenants, so an option fee in WA, already prohibited in the ACT and the NT, seems unnecessary.”

Although the amendment was lost, in debate the Government indicated option fees would be set in regulations at around $50-$100.

“The current market practice is to charge one week’s rent as an option fee. With the current median rent in Perth being $395 a week, option fees clearly represent a much greater burden on prospective tenants than the administrative costs that a lessor is likely to incur as a result of a tenant turning down a property.”

“The Greens support the Government’s move to limit option fees to help ease the financial strain and reduce the risk of homelessness in lower socioeconomic prospective tenants,” concluded Ms MacLaren. “The Greens would go further to remove option fees and establish caps on rent increases to improve rental affordability.”