Labor sides with renters on fee

A Labor government would scrap a widespread fee slapped on prospective tenants applying for multiple rental properties, Opposition Leader Mark McGowan said today.

The rental option fee, in most cases a week’s rent, is collected by landlords or agents while they check references and decide whether to offer the tenancy.

If the tenancy is accepted by the applicant, it is credited towards future rent, and returned in full if the tenancy is not offered.

But if the applicant decides to accept a different tenancy, the fee is kept by the landlord.

Mr McGowan said the rental option fee was introduced in 1987, when there were far more properties available to rent than prospective tenants, to stop applicants applying in an ad hoc fashion.

He said today’s tight rental market meant most people applied for multiple homes out of necessity and should not have to pay a week’s rent just because more than one landlord deemed them suitable tenants.

“The average rent now is $460 a week. For many suburbs and many communities across the state it’s far higher than that,” he said.

“In a town like Port Hedland, that can be $2500 just to apply for a property.”

Mr McGowan said only NSW and WA continued the fee.

Real Estate Institute of WA president David Airey said under changes to the Residential Tenancies Act which passed through parliament last year, the rental option fee was set to drop to $50 from April 1.

“That makes it a much more affordable charge,” he said. “In respect of the current legislation, most agents understand that it’s a huge burden if you want to go around and apply for two or three properties then in each case find a week’s rent.

“But under the new proposals, finding $50, we don’t think is a huge burden.”

Mr Airey said $50 was a reasonable cost given the time involved in checking references for applicants who end up rejecting the offer.