Tenant 'blacklists' another reason to regulate property management: REINZ

Thursday, 4 February 2021

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“Bad tenant” websites are not acceptable and their creation is another example of why property management should be regulated, the Real Estate Institute (REINZ) says.

Privacy Commissioner John Edwards has announced he will be looking into the information that landlords are asking of applicants, and what is then done with that data, after a rise in complaints.

This move came after a spate of reports about several different landlord websites and Facebook groups providing access to lists, or databases, of people who were considered to be undesirable tenants.

Edwards said he was concerned about some of the practices, particularly during a time when pressure on tenants was high.

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Real Estate Institute chief executive Bindi Norwell welcomed the Privacy Commissioner’s move and said it was disappointing to hear that “bad tenant” databases were being created.

Doing so was potentially a breach of the Privacy Act and there could also be defamation issues as some of the listings apparently contain unverified information, she said.

Privacy Commissioner John Edwards will be looking into what landlords are asking prospective tenants.

“From our understanding, we believe that most of the users of these websites are private landlords rather than property managers.

“We will be very clear with our members that the use of such a database is likely to be unlawful and is not something we would consider as acceptable.”

People working in the provision of rental properties needed to understand their obligations under the Privacy Act and respect individuals’ privacy, Norwell said.

This included using a two-step application process, recommended by the Privacy Commissioner, whereby more detailed information wasn’t required until a potential tenant had been identified as a preferred candidate.

The Privacy Commissioner’s guidelines on exactly what information landlords and property managers could and could not collect as part of the tenancy application process were also available to help out.

Tenant ‘blacklists’ are unacceptable and likely to be unlawful, REINZ’s Bindi Norwell says.

Given the existing guidelines were created following controversy over similar information collection issues two years ago, Norwell said it was disappointing to hear it was still an issue.

“With such a shortage of good rental properties to choose from, if people are operating outside the guidelines, it’s unlikely a potential tenant would make a complaint for fear of retribution – either over a specific property or future properties.”

That was why it was important that regulation of the property management profession occurred as quickly as possible, she said.

The institute has long spearheaded a drive to raise the standards of property managers but, in recent years, that campaign has gathered steam amid growing calls to regulate the industry.

In last year’s election, the Labour Party campaigned on a promise to do just that but, to date, nothing has eventuated.

Norwell said she was keen to hear updated information about this from the Government.

Meanwhile, the NZ Property Investors Federation has emphasised it did not believe that tenant “black lists” were a fair or transparent way to find out about a tenant.

NZPIF executive officer Sharon Cullwick said such lists were one-sided and probably more to do with the relationship between the landlord and the tenant rather than with the tenant themselves.

“These lists can unfairly keep a tenant out of the market because of inaccuracies… The collection, retention, and disclosure of personal information on tenants must be open and fair.”

However, the Government’s tenancy law reforms, which come into effect on February 11, would remove the ability of a landlord to terminate a tenancy by a no-cause 90-day notice, she said.

“Therefore it is now even more important to select tenants carefully and landlords will need to do extra checks. But a tenant can always decline to give any private information or to answer any intrusive questions.”