A real estate agent in NSW was fined almost every day from March to May for illegal rent bidding.
Rent bidding is illegal in NSW. It is the practice of an agent asking for offers higher than the advertised price.
The NSW Government placed undercover investigators at over 70 open homes to catch out real estate agents in breach of the laws.
First, when was it banned?
Rent bidding was outlawed last year under the former NSW Coalition Government. Similar measures had already passed in other states, including Victoria and Queensland.
The law stopped agents from asking prospective tenants to make higher offers on rental properties. However, it didn’t stop tenants from volunteering higher offers.
Showing a property without a price and with terms like ‘offers from’ or ‘by negotiation’ was also banned.
The crackdown on rent bidding
The NSW Government didn’t initially issue fines for illegal rent bidding. They opted to warn agents who may have been in breach of the laws instead.
Educational letters were sent to 306 real estate agents in December. This followed a Government inspection of 12,000 online rental properties.
Then, the fines
The first fine for rent bidding was handed out on 8 March.
Fifty additional fines worth a total of over $50,000 were issued up to the start of May.
Undercover inspectors observed how real estate agents were interacting with potential tenants during this time. This included watching to see if higher offers were invited by an agent.
New rent bidding legislation
Further protections against rent bidding have been set out in new legislation tabled by the NSW Labor Government, now led by Premier Chris Minns, last month.
Landlords or property agents would be required to alert all applicants of a higher rent offer received from a prospective tenant if the laws are passed.
They’d also need to take “all reasonable steps” to change the advertised price for the rental to the highest received offer.
Landlords or agents would need to notify all prospective tenants of an increased rent offer within one business day of the offer being made. This would also have to occur before the prospective tenant is selected for a tenancy agreement.
Fines of up to $11,000 would apply for breaking these rules.
A Parliamentary Committee has been established to assess the strength of the bill, and will submit its final report this month.