The general manager of a property management company caught charging an exorbitant fee for "administration" has apologised and severely reduced the fee.
Finn Carroll was asked by his property manager at Oxygen Rentals to pay $1437.50 after he asked to have two people replaced on the tenancy.
Mr Carroll queried the high price, and was told the charge was one week's rent plus GST to cover "administration costs".
But after Mr Carroll told The AM Show about the charge on Thursday, Oxygen Rentals agreed to lower the fee to $250 plus GST.
General manager Christian Cosbalt admitted to The AM Show on Friday that in hindsight, the fee was too high and apologised.
"To be honest I wasn't aware the protocol was in place, and it's since been rescinded and common sense has come into the equation."
Housing Minister Phil Twyford told The AM Show cases like Mr Carroll's are why the law is being changed to ban letting fees.
"There is no justification for them. They are a fee for a service that is provided for a landlord, but tenants get stung with it."
The Bill is currently before the select committee and the law is expected to be changed before the end of the year, when students traditionally move flats.