10 May 2024With cybersecurity breaches on the rise, people are becoming increasingly worried about data collection by companies and wondering how secure their personal information is.
Data collection demands from real estate agents
As the nationwide shortage of rental properties continues unabated, prospective tenants are facing increasing demands from landlords and their agents for more and more detailed information on their finances and personal background.
There are reports that some agents are demanding social media accounts, children’s names, pet profiles, and names and addresses of relatives during background checks. This is on top of the standard requirements of multiple identification documents, bank statements, past utility bills, employment details and rental history.
Is it legal to be forced to pay for your own background check?
According to an ABC report, some rental applicants have even been required to pay agents for their own background checks. (Please see Rental applicants across the country pressured to pay for their own background checks, ABC News, 3 November 2022.)
Agents or landlords who demand applicants pay for background checks on themselves would appear to be against the NSW Residential Tenancies Act 2010.
Sections 23 and 32 of this legislation limit the amounts payable by the tenant before signing an agreement to a holding fee, rent, a rental bond and a fee payable for registration of a residential tenancy agreement, if it is required.
The law states a person must not require or receive from a tenant an amount for the costs of preparation of a written residential tenancy agreement. Offenders of this section are liable to a maximum penalty of $2,200.
However, many people seeking a place to rent would feel they have little choice in the current housing crisis but to accede to requests from landlords for sensitive personal information and unreasonable, even illegal, demands to pay for their own background checks.
Pressure for standard form tenancy applications
Tenants, landlords and their agents need to be aware of the law. There is growing pressure on the government to have a standard form tenancy application that asks reasonable questions.
Dr Chris Martin of the University of NSW City Futures Research Centre says the ability of real estate agents and landlords to collect vast amounts of sensitive information is a significant concern as cyberattacks increase, and it is time governments regulated data collection in the rental sector. (Please see Cybersecurity breaches call for rental data collection overhaul, UNSW, 31 October 2022.)
“They’re collecting a lot more personal information, with arguably not a whole lot of purpose behind it,” Dr Martin said on the UNSW website. “It’s a big risk if all of that information falls into the wrong hands.”
“It’s not just a matter of protecting tenants’ data from hackers. It’s an issue for housing access. Questions about source of income, social security recipient status and whether you’ve applied for social housing can be used to deny you a tenancy, and it’s not unlawful and not regulated in any jurisdiction.”
Cyber attack on real estate firm highlights data collection risks
In 2022 real estate agency Harcourts Melbourne City revealed a cyberattack may have compromised identity documents and other details it held on its clients and tenants. (Please see Real estate firm breached, signatures and IDs stolen, ACS Information Age, 3 November 2022.)
The agency’s data collection practices may have left tenants vulnerable to identity theft. Individual landlords and some smaller agencies are not covered by the Australian Privacy Principles which govern the management of collected personal information. (Please see Australian Privacy Principles, Office of the Australian Information Commissioner.)
Even those covered by privacy rules could argue they need the personal information to find the best candidate for tenancy.
Dr Martin concluded: “The fact is it always happens that way – that it’s landlords and agents extracting more and more from tenants. It shows how asymmetric the relationship is and why we need stronger residential tenancy laws.”
For more information please see Tenant rights, rental increases and property repairs.
