Wellington students stung with over $1400 fee to change two tenants

A group of Wellington students have been hit with a massive "administration fee" for an amendment to their tenancy.

Finn Carroll was asked by his property manager to pay $1437.50 after he asked to have two people replaced on the tenancy.

Confused at the high cost of the fee Mr Carroll queried it with his property manager and was told the charge was one week's rent plus GST to cover administration costs.

"[It] doesn't matter if it's a letting fee or an administration fee or whatever you want to call it, you're still charging us 1400 bucks to do what, 10 minutes work?" he told The AM Show.

He's not even sure if the owner of the house is aware of the exorbitant fee being charged as he's been dealing with the property manager.

Victoria University Students Association President Marlon Drake said he saw the impact of fees like the one the property manager charged Mr Carroll and letting fees every day.

"It has a really negative impact on a student's mental wellbeing, a student's financial wellbeing obviously and also a student's physical wellbeing," he said.

"We actually do have students that come to us in those early weeks when they're moving into a new flat and they genuinely just can't afford food."

Mr Carroll said his flat ended up splitting the letting fee amongst the group and everyone had to pay around $200.

AM Show host Duncan Garner said the fee was a rip off and asked if there was anybody in New Zealand who thought charging such a fee was okay.

Co-host Amanda Gillies suggested Mark Richardson may hold a slightly different view, and while he did think this fee isn't right he does think letting fees should be used in some cases.

"If I had to pay the agent to find me someone for my rental, but I wasn't going to take that agent on to manage it for me that agent then would find me a real troublesome tenant just to prove that I should be using them as a manager," he said.

The Labour Government has introduced an amendment to the Residential Tenancies Act to prohibit the charging of letting fees. The select committee will report back to Parliament on it by October 5, 2018.