Martin, Chris --- "NSW regulates tenancy blacklists" [2004] PrivLawPRpr 38; (2004) 11(3) Privacy Law and Policy Reporter 79
NSW regulates tenancy blacklists
Chris Martin
In a parallel development to the TICA v Tenants Union complaints to the federal Privacy Commissioner (see (2004) 11 PLPR 14), governments are moving to regulate tenancy databases like TICA (General Editor)
Real estate agents are finally to have their use of tenant databases regulated by the NSW State Government. The Property, Stock and Business Agents Amendment (Tenant Databases) Regulation 2004 creates a new Rule of Conduct for the use of tenant databases, and is to commence 15 September 2004. Agents found to be in breach of the Rule may be liable for fines and suspension of their licenses The new Rule of Conduct is a welcome development, but problems remain.
Broadly speaking, the new Rule of Conduct does two things: first, it sets out restrictions on listings by agents; and secondly, it attempts some indirect regulation of tenant databases themselves by setting out requirements that databases must meet so that agents can legitimately list on them. However, in using a Rule of Conduct to regulate the use of databases, the Government has ensured that there are a number of serious shortcomings in the restrictions. Most obviously, the new Rule of Conduct applies only to real estate agents, and not other users of tenant databases: residential park operators, boarding house owners, community housing associations and private landlords are not covered. Worse, the restrictions in the Rule do not apply to all people who are listed on databases – only listings made after 15 September 2004 are covered. Finally, tenants cannot take action against breaches of the Rule in the Consumer, Trader and Tenancy Tribunal or a court: instead of a process of public hearings and orders made according to the law, it will be up to the Commissioner of Fair Trading to decide if and what action will be taken by the Commissioner against an agent.
The Tenants’ Union says more still needs to be done. ‘The Regulation is no substitute for proper laws that comprehensively deal with tenant databases and that give tenants enforceable rights against listings,’ says David Vaile, Chairperson of the Tenants’ Union. ‘Governments around Australia still need to pass legislation that restricts tenant databases, if not bans them outright.’
New restrictions on agent listings
Under the new Rule of Conduct, agents may list tenants only if all of the following circumstances are met:
• the person to be listed was a tenant under a residential tenancy agreement. In other words, an agent cannot list a person who is merely an occupant of premises (that is, their name is not on the tenancy agreement) or who is a boarder or lodger. This provision also appears to mean that a person cannot be listed by an agent just for making a tenancy application, as currently happens with the TICA Enquiry database.
• the tenancy has been terminated. An agent cannot list a person during their tenancy.
• the agent has given written notice of their intention to list the person and the reason for doing so. This requirement does not apply, however, if the agent cannot locate the person after making reasonable inquiries.
• the person has been given a reasonable opportunity to respond. This includes making submissions to the agent in respect of the proposed listing, and reviewing or correcting the proposed listing. Like the requirement for notice, this requirement does not apply if the agent cannot locate the person.
• any objection by the person is noted on the database. If the agent and the person disagree about the personal information to be listed, any objection by the person in relation to the information must be noted on the database.
• the reason for listing is prescribed by the Rule. Five prescribed reasons for listing are provided by the Rule, as discussed below.
The requirement for specific, limited reasons for listings is one of the stronger aspects of the Rule of Conduct. Under the Rule, a person may be listed only for one or more of the following reasons:
• the landlord is owed money because of rent arrears. The Rule also provides that to be listed for this reason, the person must owe more than the amount held as a rental bond.
• the landlord is owed money because the tenant intentionally or recklessly caused damage to the premises. The Rule also provides a number of additional circumstances that must be met before a person can be listed for this reason: the owed amount must be more than the amount held as a rental bond, and the agent must have completed a condition report and reported the damage to the police.
• the person has not paid money as ordered by the Tribunal.
• the tenancy was terminated by the Tribunal for serious or persistent breach.
• the tenancy was terminated by the Tribunal because the tenant caused, or was likely to cause, serious damage to the premises or injury to the landlord or agent.
These restrictions on listings should make some of the more outrageous practices of tenant databases and their members, such as the use of the notorious ‘refer to lister’ listings, a thing of the past. It should be borne in mind, however, that for the thousands of people already listed on databases, the new restrictions will not help them escape past listings, no matter how seriously the listing would contravene the Rule if made post-15 September 2004.
New requirements for tenant database operators
Though the Rule applies only to real estate agents licensed in NSW, it also sets out a list of requirements that should have wider implications for the tenant database industry more generally. ‘It’s regulation by long chopsticks,’ says Grant Arbuthnot, Legal Officer for the Tenants’ Union. ‘The Rule does not affect database operators directly, but they will have to meet the requirements if they are to keep their customers. It will be the agent who is in breach if they make listings on a database that does not comply with the requirements.’
For NSW agents to be able to list on them, tenant databases will have to meet the following requirements:
• free access. All persons listed on the tenant database must have free access to information held about them.
• corrections and amendments. If a listed person claims that information about them is inaccurate, out of date or incomplete, the information must be amended, without charge or, if the person’s claim is disputed by the agent, the claim by the person must be noted on the database.
• timeframes for listings. If a person is listed for a debt and they pay the amount owed with three months, the listing must be removed from the database within 7 days; if they pay the amount after 3 months, the listing must be changed to note that the debt has be repaid and the listing removed within three years. Listings for reasons other than debts must also be removed with 3 years.
The Regulation is at http://www.fairtrading.nsw.gov.au/pdfs/corporate/psbatenantdatabasereg.pdf
Chris Martin, Policy Officer, Tenants’ Union of NSW