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Dob in a rental auctioneer

By johnboy 12 January 2009 36

The ABC brings word that the ACT Tenant’s Union is after your help.

    The ACT Tenants Union is urging people to report any real estate agents who initiate a rent auction for sought after properties.

Basically they’re at the data gathering stage with a view to pushing for new laws against rental auctions if problems are found.

If you have got a recent rental horror story share it in the comments below, but also send it through to the Tenant’s Union.

What’s Your opinion?


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Dob in a rental auctioneer
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Passy 9:32 pm 14 Jan 09

iObject said :

The tenants’ union advice people were a great help last time I needed advice about a real estate agent being dodgy, but they really need to be open more to help people who are getting screwed over by unscrupulous rent-auctioning agents…

They’re open something like 9-1 on three days a week, and you have to keep calling till they answer! The people who work there do work very hard, but surely they could put on some more staff?

It’s the Tenants Advice Service,(TAS) not the tenants’ union, which does the advice. The union does the admin side, and advocates for tenants in political, social, legal and other forums etc. TAS is actually available by phone 5 days a week, 9.30 am to 1 pm. They are also open for calls from 4.30 pm to 8.00 pm on Tuesdays. (Phone number is 62472011). However they are Government funded which means the number of staff they have is determined by the level of funding from Government. The ALP is slightly less stingy than the Libs in government, but still stingy. The funding is completely inadequate so at best they have two people dealing with enquiries, and each takes about 45 minutes to sort out properly plus 15 minutes write up time. All advice has to be recorded by the phone operator and then checked by a solicitor. That means at best the two can deal with about 8 people all up per day – sometimes a little more, sometimes a little less. The demand for phone advice is much greater than 8 people a day – more like 30 or 40. The demand far outstrips the ability of the Service to provide adequate access to the phone service with so few staff. People should lobby the ACT Government (John Hargreaves and Simon Corbell) for more TAS funding to employ more staff to deal with the many many tenants who want advice over the phone.

That’s why TAS has a website where many of the common issues are dealt with and this often obviates the need to ring. Have a look at and browse through http://www.tenantsact.org.au/Advice/home.html

I think rental auctions distort the market since in times of rental scarcity (as is now the case in Canberra) the desire to find place to live may well outstrip the capacity to pay. Couple that with inadequate public (subsidised) housing for lower income earners and you have a recipe for disaster. Not to mention that the person with the most money who can make the highest offer may not be the best tenant.

Since auctions may be a breach of the ACT Fair Trading ACT and Commonwealth Trade Practices Act if a rental price is mentioned in the ad, one way round this would be just to say something like ‘Offers over $450 per week welcome.’ As long as it is not bait advertising (ie the $450 has to be around market price, not something markedly below it in an attempt to get people in) then the ad and the auction breach no laws, certainly not the Residential Tenancies Act (assuming it is new tenants they are advertising for.)

The Residential Tenancies Act also has a formula for determining rent increases after 12 months, providing the same tenant (or one of them) is still in the property. It is the ACT Housing CPI (which rises higher than the normal CPI) plus a 20% loading. If the figure is greater than that derived from the formula the Landlord has the onus of proving the increase is not excessive before the Residential tenancies Tribunal. If it is below that figure, the tenant has the onus. The formula can be accessed through the TAS website.

It is unclear to me why the loading exists – it is self fulfilling and guarantees further CPI housing increases are greater year after year. And then we add on a 20% loading.

It’s a nice idea, but when land is released back of beyond we then hear all the whinging about how it’s “too far out” and “I can’t ride my bike from there”, etc. I’m all for land release to stabilise the market, but people need to realise that if they’re buying for the first time, or on a budget, they don’t necessarily get to live in a nice leafy inner city suburb.

Piratemonkey 11:50 pm 12 Jan 09

How about the government just release more land and relieve some of the pressure on the rental market? Sure home owners will cry but how about we look after those in the more precarious positions a little eh?

Hell less money filling the pockets of land lords will push more cash into being spent locally by renters. Not spent on jet setting by retirees. A few nice big chunks of land plus a bunch more apartments and this problem would be gone most quickly.

swamiOFswank 10:42 pm 12 Jan 09

I recently rented a place. Allow me to share about the underhanded kind of rental crap that goes on. I found a place on Allhomes advertised by an agent at $365 per week. I phoned them, went to view the house, and when I called them back an hour later to say that I’d like to apply, was told that someone else had just offered $375 and I’d have to match it to apply. Lo and behold, when I returned to the Allhomes listing to check the price, it had of course been altered to $375. At that point I called the agent again and queried the increase, only to be told “that’s what the market seems to think it’s worth”. I certainly didn’t, and therefore didn’t apply – which is my prerogative, I suppose.

Irrespective of whether it was worth that, that kind of real estate agent rubbish is what needs to be stamped out. I imagine they told the other applicant that I was offering more than them.

Then, those that advertise ‘pet friendly’…how about making it clear what kind of pet would be okay – eg cat, dog, bird, fish, axolotl… Don’t waste everyone’s time by saying pet friendly on the ad, then telling me at the inspection that only a certain type will be considered.

Oh…and to the owners who “patched and painted” really really badly with mismatched paint all over the place between the time I inspected the property, signed the lease and then moved in – your painting stinks. The place I rented recently looks like a patched-up bogan shit-hole. Thanks for nothing you disrespectful jerks – you wouldn’t be happy living there with walls and doors like that, I’m sure.

/rental rant

iObject 10:18 pm 12 Jan 09

The tenants’ union advice people were a great help last time I needed advice about a real estate agent being dodgy, but they really need to be open more to help people who are getting screwed over by unscrupulous rent-auctioning agents…

They’re open something like 9-1 on three days a week, and you have to keep calling till they answer! The people who work there do work very hard, but surely they could put on some more staff?

caf 4:18 pm 12 Jan 09

I guess you could organise the opposite in times of “rental plenty” – have prospective tenants post their requirements on an online auction site and have landlords bid for their custom – lowest bid for a property acceptable to the tenants wins.

Fair point. These things emerge for a reason.

H1NG0 2:58 pm 12 Jan 09

I doubt they would bother with auctions if there wasn’t already a strong rental market.

It would be beneficial to the applicant during times of rental ‘plenty’, and beneficial for the landlord during times of rental shortage.

H1NG0 1:19 pm 12 Jan 09

I’m glad I’m not currently looking for a place to rent because I don’t see how an Auction would be beneficial to the applicant other than the fact that they secured the house. I would walk away feeling ripped off, especially if you knew someone in a similar place was renting for much less. Its good if you are a landlord.

I tend to do the same, Fiona. I’d rather have a reliable tenant paying a few bucks below market.

The auction question is more about finding the tenants in the first place.

Fiona 1:09 pm 12 Jan 09

harvyk1 said :

The other interesting point is if you have someone payiong $700 a week for a $350 a week property, how long do you think they will stay in your property once the demand and prices fall? I’d personally rather have someone in a property which I could get $350 per week and yet only charging them $300 if it meant that they would stay there in the long term, given finding new tenants can be expensive, not to meantion the weeks without any rental income.

One of the reasons we don’t rush to put up the rent on our places in Newcastle. We’d rather keep a tennant in and raise the rent $5-10/week rather than rushing to match the current going rate, raising it $30 and losing someone reliable, and weeks of rents and advertising costs…

At our loast place we were renting here in Canberra, the new owner wanted to increase it $55/week to match the local rates… and not offer us a new contract.

Fiona 1:06 pm 12 Jan 09

Thumper said :

Ridiculous, not ‘red’

😉

Thank you.

I keep having to think back to the word roots and morphemes to figure out the spelling. It’s like the word ‘definitely’… I always have to think that it’s from the word ‘finite’ to remember that second i is not an a.

But now I’m off-topic. 🙂

I suspect that rental auctions are like other potentially undesirable aspects of modern society. As such, maybe we need to take the same approach: educate, regulate, and let it happen.

The way I see it working is that you either turn up (or teleconference in) at a given time, an auctioneer opens the bidding, you bid what you want, and the highest at the time gets it. Contract signed on the spot (or via fax/email), and the tenant has officially been found. If someone turns up later with a better offer, bad luck.

For higher priced rentals, I think this would work well. It should also be noted that whether or not people select rentals by auction has nothing to do with property availability.

natecv8 12:49 pm 12 Jan 09

The other interesting point is if you have someone payiong $700 a week for a $350 a week property, how long do you think they will stay in your property once the demand and prices fall? I’d personally rather have someone in a property which I could get $350 per week and yet only charging them $300 if it meant that they would stay there in the long term, given finding new tenants can be expensive, not to meantion the weeks without any rental income.

Sure, I agree completely. As it stands, though, there’s little option to take the route of allowing tenants to bid higher in high-demand times. I’m not naive enough to believe that it will be “like this” forever, but at a time when housing starts have stagnated and many populations are going up, why not allow competition between prospective tenants?

jube_V8Fairlane_235kw 12:49 pm 12 Jan 09

I used to work for the largest real estate/property management company in Canberra as a leasing consultant (a few years ago). These silent auctions certainly happened then, but they were never actively sought or encouraged. In every case, it was instigated by the potential tenant – not the landlord.

Most landlords then, even with higher offers, went for the best tenant rather than the best price. There were a few exceptions, though. The idea certainly has picked up more since then from my knowledge, but as said before – the market will determine the price.

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