Rent bidding was recently banned in NSW, and it might have been the first time you’ve heard the term. If you’ve ever looked at leasing a property, there’s a good chance that you’ve unknowingly or knowingly been a part of it.
What is rental bidding?
Rental bidding is when a real estate agent or landlord advertises a rental property with a price bracket rather than a fixed price, or suggests that the price may be open to negotiation.
This creates an auction-like approach where prospective tenants offer more than the advertised price in an attempt to successfully secure the property.
Why is it banned?
The issue with this approach is that in a rental environment with far more prospective tenants than rental properties - like the one we’ve seen in the Sydney rental market throughout 2022 - a bidding situation places many trying to secure a home at a major disadvantage.
Many might say that landlords are at fault for promoting and encouraging the practice of rental bidding, but in reality, it’s almost always prospective tenants who are fuelling the practice.
Banning it means that properties will no longer be allowed to be listed with a price range or state that the price is negotiable, with the aim of providing tenants with fairness, certainty and security.
How is it regulated?
The new requirement is regulated by the Department of Fair Trading which is conducting checks of rental listings, and allows tenants to report agents or landlords who are breaching it. The Department also has the ability to issue infringement notices.
However, while rental bidding might create an unfair playing field, prospective tenants are still able to legally offer more than the advertised rent - and there is nothing to stop landlords from accepting offers from those who approach them with one.
