Yahoo Finance Renter shocked by landlord's 'dodgy' move - but may sign lease anyway
The incident has exposed the harsh reality of the rental crisis for thousands of Australians.
An Australian woman facing homelessness says she's either been targeted by a scammer or an opportunistic landlord trying to "blatantly extort more money" out of her, sparking a warning for would-be tenants.
Nicole* told Yahoo Finance she had not been able to find a home, despite applying for hundreds of rental properties in Melbourne. The 26-year-old admitted she was reaching a point of desperation and was even considering dealing with a "dodgy landlord" who appeared to be rent-bidding to try to jack up the price.
A "chronic undersupply" of rental properties has made the market expensive and competitive, with applicants like Nicole, who has a stable job, unable to find secure housing. She shared an interaction she had with a "landlord" when she inquired about a one-bedroom apartment in the CBD going for $500 a week, which exposed two different issues confronting tenants.
The admin worker made an application on Saturday without having inspected the property and was excited to get a text from someone claiming to be a landlord, who wanted to lease the property to her. But, when the "landlord" sent the details, the bond figure didn't add up to the required four weeks' rent. She was asked for $2,383 instead of $2,000.
When Nicole questioned the figure, she was told the landlord was under the impression she was offering $50 over the advertised rent, and that they'd had another offer of $525. "They proceed to not only falsely claim that I had applied for the property for $550 per week, but also claim that they had another tenant who has offered $525 - which, in my opinion, was falsev- with the intention to encourage me to change my desired rent rate per week to $550," Nicole told Yahoo Finance.
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At the time, the woman was worried she'd mistakenly written down the wrong amount, so apologised and said, "You'll have to go with the other tenant". The owner then back-pedalled and encouraged Nicole to come in for an inspection, which raised red flags that the whole thing could be a scam.
"If it seems too good to be true, it probably is, and the way that landlord tried to blatantly extort more money from me under false pretences has made me super-suspicious and I thought I'd better be cautious of this situation," she said.
Nicole is right to be cautious. Last month, Victoria Police issued a warning about "deplorable" plots seeking to take advantage of those struggling to find a home in the rental crisis after multiple people were scammed out of thousands of dollars.
"Prospective renters should only be dealing with licenced real estate agents and, if something sounds too good to be true, it generally is," Port Phillip Crime Investigation Unit Detective Senior Constable Demi Pascoe said.
Beyond scams, the rental market is also facing another huge issue driving up the cost for tenants: rent bidding.
What is rent bidding and is it legal?
With vacancy rates at an all-time low across the country, "rent bidding" has become a popular way to secure a property in Australia, according to RentBetter. The term refers to the practice of where tenants offer higher amounts of rent than is advertised in an effort to be accepted for a lease, and can significantly put tenants at risk of being taken advantage of.
While rent-bidding rules vary across different states and territories, most - including the ACT, NSW, Queensland, South Australia, Tasmania and Victoria - ban the practice. It's not explicitly banned in Western Australia, however, there is a proposal in place to ban the practice under the state's new tenancy laws. In the Northern Territory, landlords must ensure fair competition and transparency when engaging in rental-bidding practices.
According to Dr Chris Martin, senior research fellow at the University of NSW's City Future Research Centre, the landlord's actions are "arguably unlawful".
"This appears to be an attempt at getting around the rules by pretending that the applicant in fact made an unsolicited high offer, which is not against the rules. I'd trust the applicant's recollection over the landlord's version," he told Yahoo Finance.
"I suspect the landlord is soliciting for a higher offer in the guise of confirming an unsolicited higher offer from the applicant. I hope the applicant knocks them back because you don't want a tenancy with a landlord who is dishonest from day one."
Martin explained that a proposal had recently been raised in Victoria to ban landlords and agents from accepting unsolicited higher offers. "I'm not convinced that that is a great move," he said, "It might encourage landlords and agents to pitch their ads high, and there's a question about how much of a line of sight regulators have."
'Desperate' tenant fears homelessness
Nicole doesn't want anything to do with rent bidding. "Not only is it illegal but it also contributes to rent increases, the already shockingly high rent prices in Melbourne, and the entire rental crisis, in general".
Since speaking out, the young woman has found her original application for the rental, which she sent to the landlord, proving she only offered $500 a week in rent.
"I now have photographic evidence of this landlord not only illegally partaking in rent bidding, but also blatantly lying to me, saying I offered $550 when I did not," she said. "Trying to pit me against other 'bidders' who probably didn't even exist in the first place to get an extra $50 out of me every week. $50 is almost my food shop for the week!"
But, with time ticking, Nicole fears she may be left with no choice but to take up the offer. "I haven't been approved for any other of the probably hundreds of properties I've applied for," she said. "And, since I have to move out soon and am getting quite desperate for a rental and to not become homeless as a person with employment, I still might just have to deal with this dodgy landlord unfortunately.
"That's just the state that we're in now with this rental crisis, which is only getting worse and worse, and so many people without homes ... It feels really hopeless out here."
*Name changed at request of interviewee
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