With rental properties becoming more and more difficult to obtain, there has been a trend of Real Estate Agents engaging in a process referred to as rental bidding between prospective tenants.
Rental bidding is a practice in which Agents encourage a prospective tenant to increase their rental offer on a property because it may increase their prospects of securing the property. Essentially an auction is conducted between the prospective tenants to decide what rent will be paid, playing each offer against the other, which results in a higher rent being required.
A recent change to the Property and Stock Agents Regulations now prohibits Licensed Real Estate Agents from engaging in this practice.
From 17 December 2022, Agents can no longer invite offers of rent that is higher than the advertised price for a residential property.
These changes also effect the ways in which a residential property can be marketed for rent. A price range or a “starting price” can no longer be utilised by licensed agents. There must be a fixed rent amount listed on the advertisement.
This does not mean however that a higher offer cannot be accepted, however agents are prohibited from disclosing if higher offers have been made and they certainly cannot suggest you offer an amount over and above the rent noted in the advertisement.
There is, however, a bit of a catch. This change only applies to residential properties which are being managed by a licensed real estate. These changes do not apply to anyone who is privately advertising a residential property for lease.
Real estate agents can individually face fines of $550.00 and businesses of up to $1,100.00 for breaching these regulations. General or ongoing non-compliance can see businesses faced with Court imposed fines of up to $11,000.00.
If you need legal assistance, contact Everingham Solomon’s team of experienced Solicitors because Helping You is Our Business.
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