Property managers flout privacy rules
Property managers are in the gun for asking potential renters to share more information than is legally allowed to secure a home, helping shape the case for regulation.
Tuesday, September 27th 2022, 11:07AM 
2 Comments
by Sally Lindsay
Consumer NZ recently used mystery shoppers to find out how much information rental property managers were collecting from renters, potentially breaching the Privacy Act.
Alarmingly 6% of rental agents asked the mystery shoppers to include bank statements in their application for a rental, which is not allowed under the Office of the Privacy Commissioner’s (OPC) Guidance for Tenants.
About 10% of agents encouraged the shoppers to volunteer extra information with a cover letter and rental CV, which could include information such as age, gender, relationship status and employment status.
Some property managers said the more information the shopper gave, “the better their chances [of securing a rental property] and the smoother the process”.
One suggested extra information would “help the shopper’s application stand out from the others”.
Mystery shoppers also asked how their information would be stored, and 14% of rental agents became noticeably disinterested in the caller when they asked about the privacy and security of their information.
One mystery shopper says the more questions she asked, the less interested [the agent] seemed, and [he] almost got annoyed by them”.
As part of the study, Consumer asked people to share their experiences in the rental sector. This received one of the highest response rates in the watchdog’s history.
Gray, a Christchurch 25-year-old, said her landlord asked “some really weird questions”, including how long she had held her phone number, and asked for her boss’ phone number to verify her place of work.
Gray was also asked to provide bank statements and salary details.
Tenants’ guidance
The OPC’s Guidance For Tenants says a landlord shouldn’t ask for bank statements to assess their spending habits. “Asking about how tenants spend their money is unfair and unreasonably intrusive, except in exceptional circumstances, says the OPC.
Consumer NZ chief executive Jon Duffy says the rental market remains tough in many areas of the country, and many prospective tenants are offering up more information than required just to get a shot at being considered for a property.
“It’s concerning that some renters are expected and encouraged to give up sensitive private information, but it also raises questions about what happens to this information.”
Duffy says some property managers could be discriminating against some applicants, based on the information they provide.
OPC developed its guidance in response to growing concern over a power imbalance between tenants and landlords due to a shortage in the housing market.
“Some property management agencies were asking for detailed information from prospective tenants as part of their selection process,” says Michael Webster, the Privacy Commissioner.
Little power
“Recognising tenants had little power to challenge those responsible for their housing security, the OPC took a proactive stance to protect the rights and privacy of tenants and prospective tenants.
“We worked with property management agencies and renters’ advocates to develop guidance to clarify the rights and responsibilities of tenants and landlords under the Privacy Act,” says Webster.
He says mystery shopping is one way for the OPC to monitor how well the guidelines are being followed and target our compliance activities.
The OPC’s guidance for tenants notes landlords shouldn’t collect unnecessary and intrusive information from prospective tenants.
However, it also says the amount of information a prospective tenant gives to a landlord when applying for a property is their choice – but the amount of information provided may affect a landlord’s decision to offer a property.
The guidance designed to help landlords and property managers comply with the Privacy Act (2020 says a landlord or property manager should never ask a prospective tenant for information protected under the Human Rights Act, including:
- Sex (including pregnancy and childbirth);
- Sexual orientation or gender identity;
- Relationship or family status;
- Religious or ethical beliefs;
- Colour, race, ethnicity or national origins (including nationality or citizenship);
- Physical or mental disability or illness;
- Age (other than whether the tenant is over 18);
- Political opinion;
- Employment status (being unemployed, on a benefit or on ACC.
Pressured
Duffy says prospective tenants should not be disadvantaged for refusing to provide information that shouldn’t be asked for at all.
“Renters are feeling pressured to share personal information to sell themselves to a potential landlord or agent,” he says.
“Ultimately it is up to the applicant how much information they share. The way we see it, they are damned if they do and damned if they don’t.”
Duffy says Consumer hopes the research findings encourage property agents to clean up their act.
Duffy says the survey’s findings make the case for greater regulation of property agents. The Housing and Urban Development Ministry is investigating a regulatory regime.
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The Privacy Commissioner guidelines are just that, they are not enshrined in Law. They are just the recommendations of a well paid and secure public servant enthroned in a four-window office in a Wellington tower block.
The only legal restrictions are laid out in the actual Privacy Act.
The real question is why a big bank who is lending someone $800,000 in cash is entitled to ask more questions and gain greater security than a private landlords who is granting someone sole occupation and total control over an $800,000 property.