Welcome Guest [Log In] [Register]


Reply
Landlord's private databases intrude into private lives of Australian renters; Australian tenants lack rights compared to international peers
Topic Started: 10 Dec 2013, 03:29 PM (2,109 Views)
Admin
Member Avatar
Administrator

Quote:
 
Companies spy a way to exploit tenants

Philip Soos & Paul Egan
9 Dec, 2:39 PM

Posted Image

Suspend disbelief for a moment and imagine you are a residential landlord with a property for rent, seeking prospective tenants through a property manager. After advertising, it later comes to your attention that many potential tenants have assessed your suitability as a landlord and that of your property manager, via online databases that record wide-ranging personal information.

To your horror, you discover tenants have the same level of informational awareness as you have of them, finding recorded instances of ‘objectionable landlord/property manager behaviour,’ delays in completing repairs/faults and to a satisfactory standard, failures to abide with relevant state/territory regulations such as attempting to significantly raise the rent without sufficient notice, a full record of adverse findings at the relevant Civil and Administrative Tribunal, failures to reasonably refund security deposits, and alleged harassment of tenants.

With one simple search in a landlord/property manager database, tenants are easily able to find all instances of recorded bankruptcies and court judgements against you, as well as verify your identity and current visa arrangements (if applicable). Indeed, such a possibility is a nightmare for landlords and property managers, given the entrenched power they wield over tenants.

Landlords need not fear this scenario, as the unfortunate tenants in Australia’s private rental market have no such power.

The rising use of tenancy databases over the last two decades is well known. Property managers (and self-managed landlords) can access databases to assess whether a potential tenant’s application should be granted or denied, examining their prior rental history and if any blacklistings have been recorded.

If tenants have caused trouble and violated the law (rent arrears or property damage), they can be blacklisted so that other property managers may choose to exclude them from potential tenancy. Fair enough. But where are the databases to track the histories and blacklistings of landlords and property managers? Unfortunately, this poorly regulated system has historically resulted in malicious and unjustified entries being recorded against tenants – often without their knowledge – adversely impacting their ability to secure future rentals.

Amendments to rectify this state of affairs have been slowly implemented to redress often draconian outcomes, requiring tenant notification of an intended blacklisting and then only for specific reasons. Yet the system remains biased towards landlords. For instance, in the event of blacklisting, a person’s name often cannot be removed without either the consent of the landlord or a formal application to the CAT, seeking that the record be corrected.

Feeble privacy laws have enabled the compilation of vast information within an Orwellian private depository to satisfy the desire of landlords and property managers to risk-manage tenant applications in an overbearing manner.

Many of the 25.4 per cent of Australian households that rent (1.8 million households, 4.5 million people) and previous renters will have records held with two of Australia’s largest tenancy database providers: TICA and National Tenancy Database (NTD).

Over the past 20 years, these firms have used their access to millions of public record files in addition to maintaining a total of around 8.5 million tenancy records between them – 7 million for TICA and 1.5 million for NTD. Providing property managers with daily access to in-depth information on rental, court and visa histories is overkill, particularly when there are millions of older, subjective entries on tenants predating amendments to recent tenancy laws.

Due diligence in the form of proper checks of recent references should suffice in the vast majority of cases. Sinisterly, the Virtual Manager service established by TICA allows property managers to flag their clients on an internal system. In the event an application is made to another agent registered with TICA, the current real estate agent will be immediately notified by email of the details of the agent who took the application.

This is a gross invasion of privacy, as this system indicates your future intentions and geographical movements to a third-party without your consent. It also bypasses the normal means for a tenant to end a lease – a termination notice. Consequently, tenants may be subject to repercussions from current landlords and property managers, particularly if they are unsuccessful with their new rental application.

Perhaps of greatest concern is TICA’s proud claim that “A TICA Virtual Manager is your own internal database, which means it is not subject to any state legislation that governs Tenancy Databases or its users. This innovation is another step TICA has taken to continue to Empower the Industry.”

Presumably by ‘empowering the industry’, TICA appears to refer to the use of loopholes to bypass regulation explicitly preventing tenant listings within databases – except under the strictest of circumstances. By default, TICA appears to have created an enquiry database in the Virtual Manager program. It provides little additional potential benefit to the landlord, but poses harassment, safety and security risks for tenants.

These private databases unnecessarily intrude into the private lives of the large and growing tenant population. It seems that ‘mum and dad’ investors who provide the bulk of investment properties believe the mostly false idea of a sizeable and marauding cohort of unruly tenants, posing a serious risk to their assets, peddled by tabloid television serials.

Research has dispelled this idea, as only a tiny minority of tenants commit property damage or fail to consistently pay rent on time. Fewer evictions are the outcome of using these databases, filtering out candidates with a troublesome history. Ironically, the greatest problem faced by property managers today is ensuring landlords undertake maintenance and repairs as required by law.

One explanation for the perpetuation of overstating the risks caused by tenants is the obvious financial benefit to firms operating the databases. Another is ensuring the landlord class maintains power.

The operation of databases with millions of unregulated records used in property management decision-making is of concern.

While the scope of both recordable tenant information and gross violations of privacy should be curtailed, pre-existing information recorded prior to privacy or tenancy amendments may need to be expunged or modified so that a potential tenant’s housing prospects are not unfairly impacted by false or misleading information.

Recently, the Grattan Institute noted Australian tenants’ lack of rights compared to international peers. Tenants have less stability and security in tenure due to shorter lease terms (six to 12 months on average), lower rental vacancy rates that favour landlords during contractual negotiations, termination of lease within short time periods (30 days’ notice) and for any reason. In addition, the permission of the landlord is required for minor alterations and the ownership of a pet.

The information asymmetry between landlords and tenants can be rebalanced via significant regulatory reform of the tenancy database system to strengthen rights to privacy and the quality of information recorded. This would also include the establishment of databases to track the history and blacklisting of rogue landlords and property managers.

The more balanced tenancy systems in Scandinavia and Western Europe provide a useful guide for reform: leases lasting for a minimum of two years or even indefinite in length, several months’ notice to terminate a lease, termination would require strict and narrow reasons, and a presumption to own pets and carry out minor alterations without consent. Germany provides a sterling example of strong tenancy rights while not unfairly impinging upon landlords’ ability to operate.

The establishment of a database to track landlords and property managers, accessible to potential tenants for a small fee, would go a long way towards reducing the information asymmetry that exists in the private rental market, and decrease the incidence of predation upon tenants by slumlords and rogue property managers. This information system provides opportunity to an enterprising entrepreneur, and could potentially benefit almost two million households.

As research suggests, some of the most common complaints in private rental dwellings relates to rental cost, responsiveness to requests for repairs, the security of the dwelling, security deposit refunds and landlord/property manager harassment, it appears there is significant market demand for such a system. Unfortunately, this straightforward reform is unlikely to be forthcoming, given the power of the housing lobby over the democratic process and legislation.

Another important, though rarely remarked upon, aspect of the rental market is that landlords are not capitalists. This is a critical point to note as landlords can profit even if they do not offer tenancy by capturing the rise in unearned land prices outside of improvements. No firm can make revenue and profit without offering a product or service to the market; it would become bankrupt.

The business model for landlords is vastly different, revealing their ultimate power: the ability to withhold property from the market, giving them unjustified power over tenants by lowering vacancy rates and raising market rents. Eliminating the capacity of landlords to do so would go a long way to balancing the playing field, along with the establishment of a landlord/property manager database.

Paul Egan was previously employed as a policy officer at the state government level. Philip Soos is a researcher at Prosper Australia.

Read more: http://www.businessspectator.com.au/article/2013/12/9/property/companies-spy-way-exploit-tenants
Follow OzPropertyForum on Twitter | Like APF on Facebook | Circle APF on Google+
Profile "REPLY WITH QUOTE" Go to top
 
Blondie girl
Member Avatar


Ha ha

I do note the comment about landlords NOT being Capitalists!

:lol
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
« Previous Topic · Australian Property Forum · Next Topic »
Reply



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy