Letting Fees

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Charging the tenant

A letting fee is the charge made by letting agents for placing a tenant in a landlord's property and in New Zealand at the time of writing is normally charged to the tenant.  A letting fee is usually charged on both management and casual rentals.  Some agents charge the landlord instead of the tenant, see below.

When setting up a tenant the sysetm pre-fills the letting fee with an amount calculated from the Setup menu > Company Details > Move in Costs tab and the Properties main screen.  This may be overriden at the time and the result is stored in the tenant's Rent Change records where it may be subsequently changed if necesary.  It may also be changed in either the Tenant Opening Rent Status program or the tenant's [Details] > Opening Rent Status tab.  The amount entered must be GST inclusive.

The letting fee is a one time charge and is completely unrelated to the management and disbursement fees set in the Fee Schedule.

When the fee is received as part of a Tenant Receipt the letting fee and GST portion is transferred to the respective control accounts.

The amount of letting fees that may be received from a tenant is limited to the amount contained in the Rent Change records with any excess allocation being transferred to Tenant Held.

The amount of letting fees that may be returned to a tenant is limited to the amount that the tenant has actually paid.

Charging the landlord
If you wish to charge the landlord instead of the tenant do it like this:-

In the Suppliers create an account titled "Letting Fee Charge" which will be used to create invoices to the landlord.
In the Standard Text box enter "Letting Fee" (or similar) to save constant re-keying.
In the Payments screen enter your Trading Account as the Payee and the appropriate Payment Method.

When a property is tenanted create an invoice, (against the property), which includes the GST content.
If you create two line items in the invoice, one for the rent and the second for the GST charged, they will appear as two lines on the landlord statement.  Remember to override the content of the Text box on the second line item with GST.

On the line items tick Fee Override and zero the fees or you will charge disbursement fees on top of the letting fees.

This will transfer the fees charged out of the landlords account into this special supplier letting fees account.

The letting fees will accumulate during the month and at the end of each period pay the fees to your trading account as you would any other supplier.

Note that you will need to keep track of the GST content yourself as the full letting fee will be deducted from the landlord inclusive of GST.