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Option fees opting out in WA


30 January 2013 Stacey Moseley

Option fees must stay in Western Australia said RE/MAX WA managing director, Geoff Baldwin.


Mr Baldwin’s comments come after WA Labor leader, Mark McGowan’s announcement to do away with option fees for tenants making applications on properties.


“People should see this for what it is, a cynical vote grab with no consideration for property owners or the industry that has to administer this challenge”, Mr Baldwin said.

“Some meaningful consultation with the real estate industry would have enlightened Mr McGowan to all the influences around option fees and enabled him to come up with a less one-sided proposal."

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Recently, however Real Estate Institute of Western Australia (REIWA) president David Airey proposed the option fee be reduced to $50.


"I support REIWA President David Airey in his proposal to reduce the option fee,” Mr Baldwin said.

“I doubt any agent would argue that tenants are faced with challenges when searching for rental properties. However, property managers don’t want to be overrun with people placing multiple applications forcing them to administer an ongoing series of property lotteries.”

According to Mr Baldwin an even bigger challenge to tenants is the long waiting periods for a refund of a paid option fee.


“I doubt property management agents would have an issue with a substantially reduced option fee that can be held and immediately refunded should the applicant be unsuccessful. But to propose no option fee at all shows a complete lack of understanding of the matter and invokes deep concerns about Labor’s record of making ill considered decisions on the run," he said.

However, WA Labor leader Mark McGowan said the abolishment of the fee will especially help Western Australian families who are struggling with cost of living pressures.


“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,” he said.


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.

“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,” Mr McGowan said.

Option fees opting out in WA

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