Election 2013 Western Australia March 9

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Housing Availability iT Matters

WA Labor to cut rental application costs

Labor Statement

WA Labor will cut the upfront costs of renting a house by abolishing the rental option fee, WA Labor Leader Mark McGowan said today.

Mr McGowan said a WA Labor Government would amend the Residential Tenancies Act 1987 to remove the fee, payable when tenants apply for a rental property and is usually the equivalent of one week’s rent.

“This will help everyone in the rental market, particularly low-income earners and those living in areas with high rents and low vacancy rates, such as the Pilbara and Kimberley regions,” Mr McGowan said.

“As it currently stands, if the applicant is successful, the fee is held as payment towards their rent. If the applicant is not successful, their rental option fee is refunded.

“However if the applicant is successful with several applications, the fee is forfeited on the properties for which they choose not to sign a lease and passed on to the landlords, potentially costing applicants hundreds, if not thousands of dollars.

“This is an issue that has fallen by the wayside while the Barnett Government prioritises inner city developments at the expense of ordinary Western Australians.”

Mr McGowan said the rental option fee was introduced as part of the Residential Tenancies Act 1987 at a time when the demands on Perth’s rental accommodation were weaker and the cost of living pressures lower than they are today.

“In the metropolitan area it is not uncommon for 15 applicants to put their name down for one rental property, highlighting just how difficult it is to secure a home in today’s rental market,” he said.

“The rental option fee is an unnecessary financial burden for low-income earners in today’s real estate market, where average rents are high and rental vacancy rates are so low that prospective tenants have no choice but to apply for several properties.

“In Perth, the average cost to rent a house in December 2012 was $470 a week, according to Australian Property Monitors.

“Australian Property Monitors tips Perth to overtake Sydney as the most expensive capital city to rent a property this year.

“The average advertised rent in Port Hedland in December 2012 was $2301, up from $2124 in June 2012, according to the Pilbara Housing & Land Snapshot published by the Pilbara Development Commission.

“The rental option fee does not reflect the costs of administration associated with letting properties. The management fees paid by the lessor should pay for the costs associated with filling the tenancy.

“This exercise ends up costing some applicants thousands of dollars as they compete for housing.

“WA Labor will make life easier for Western Australian families who are struggling with cost of living pressures and one way we can help is by abolishing the rental option fee.”

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