‘Stitch up’: Renter hit with insane $858 fee

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Imagine finally securing a rental property in the midst of a rental crisis, signing the lease and moving in only to be slugged with an extra $858 “fee” that you have never heard of before.

Well, that is exactly what happened to one Sydney student after they and two others moved into a new rental property.

In a post to Reddit, the student explained that she and three others were initially approved to move into the $1500 a week rental, but one person pulled out right before signing the lease.

As this was just 24 hours before the lease was due to be signed, the renter claimed it would have “been impossible” to find someone to fill the spot in time.

So, they informed the real estate agent of the situation, with the renter claiming the agent told them “no worries” and to “let us know when you find a replacement”.

“One week on we have found somebody, I email to notify them, then they slap me with this,” the poster said, sharing a screenshot of an email from the real estate agent.

In the email, the agent claims they had spoken to the landlord about the situation and they would need to have a “new lease drawn up” for another tenant to be added.

They claimed this would incur two separate fees, $825 for the “lease fee” and an extra $33 for the “lease preparation fee”.

The Sydney renter was shocked after receiving this email from their real estate agent. Picture: saige22/RedditThe Sydney renter was shocked after receiving this email from their real estate agent. Picture: saige22/Reddit

“The new lease fees and costs will be paid by yourself as the tenant,” the email states.

“The owner approved three tenants prior to moving in, the cost of a new lease to be arranged is below.”

The renter claimed there was “no mention of a fee” when they initially spoke to the real estate agent about finding another tenant.

“Especially a $858 one. This seems exorbitantly high,” they added.

The post attracted hundreds of comments, with the majority claiming they have never had to pay a fee to add or remove tenants from a lease.

“While living in shadehouses, I have added and removed tenants from leases many times, across different properties and agents, and never been charged a fee. You are 100% getting stitched up. Should be free,” one person said.

Another conceded that it may be reasonable to pay a “small administration fee”, but this was “just taking the p*ss”.

Other’s branded the request “a joke” and a “total rip off”, with many urging the poster to contact the Tenants Union for help.

The renter added that everyone living at the property were students and would struggle to pay this extra fee, saying the situation had left them feeling “stuck”.

“It’s shocking. It surely doesn’t take that much effort and resources to re send a lease through? Feeling stuck,” they wrote.

A lack of available rentals and skyrocketing prices means prospective tenants are struggling to find housing. Picture: Chris Pavlich/The AustralianA lack of available rentals and skyrocketing prices means prospective tenants are struggling to find housing. Picture: Chris Pavlich/The Australian

According to Fair Trading NSW, landlords or agents must not charge a tenant for the cost of preparing the tenancy agreement.

They also cannot charge a tenant for their copy of the agreement or the costs associated with filling it in.

Landlords do incur fees from the real estate to find a new tenant when an old one moves out. This is typically 110 per cent of the weekly rent to cover the cost of advertising and the vetting process.

Then there is an additional smaller fee for preparing a new lease, which, again, the landlord pays.

However, many pointed out that because the existing renters had found the new tenant themselves, none of these fees would have been incurred.

One commenter claimed the real estate must be “confused”.

“Write back and say that you understand the new lease fee however the price seems excessive and have they accidentally quoted the price to find a new tenant, in which case there’s been some confusion as you intend to find and chose the new tenant yourself,” they suggested.

Australia’s rental situation is continuing to go from bad to worse, with new data revealing the national rental vacancy rate is now at its lowest level since 2018.

The capital cities experienced a 0.1 percentage point drop in the vacancy rate in February to now sit at 1.43 per cent, according to the latest PropTrack Market Insight report.

Vacancy rates measure what percentage of rental properties are available for lease, meaning that only 1.43 per cent of all rental properties are on the market for renters.

That figure is half the level seen before the pandemic, with the capital cities experiencing a -55 per cent change in the vacancy rates since March 2020.

The news is not good for renters with a lack of available supply to drive “continued rapid rent price increases over 2023”, according to report author and senior Proptrack economist Paul Ryan.

“Almost all regions across the country have rental vacancy rates below 2 per cent – meaning less than 2 per cent of all rental properties are available for lease,” he said.

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“A vacancy rate below 2 per cent points to extremely tight conditions.

“With demand for rentals expected to remain strong, we see no reprieve for tenants in the coming months.“

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