Franzen tip #1153 -Rental Bidding and Unfair Practices
Rental Bidding and Unfair Practices
Recent amendments to the Residential Tenancy Act have brought about significant changes in the way rental properties are advertised and in particular the way the rental price is displayed. It is now mandatory that rental properties are advertised with fixed rental prices, eliminating the use of price ranges and other vague terms that have previously been used.
One of the main amendments is the prohibition of rental bidding. Under the new regulations, real estate agents and property managers are strictly forbidden from soliciting rental bids or inviting prospective tenants to pay more than the advertised rental price. This prohibition seeks to establish a fair and equitable rental market by preventing situations where tenants compete against one another, potentially driving rental prices higher and disadvantaging certain individuals or groups.
The Department of Fair Trading has issued some question and answer examples of activities that are and aren’t allowed. Some of the key ones are shown below:
Can agents advertise rent as a range?
No – advertisements must include a fixed price.
Can rental advertisements include text like ‘offers from’, 'contact agent', ‘by negotiation’ or 'price available soon'?
No – advertisements must include a fixed price.
Does a fixed price need to be included on signs placed on or near the property?
No - signs used on or near the property which advertise that the property is available for rent are not required to list a price.
Will tenants be prohibited from offering higher rents?
No – prospective tenants are able to offer higher rents for a rental premises if they do it voluntarily and freely.
How should an agent respond to prospective tenants asking if they should offer a higher rent or asking what other applicants have offered?
Agents should advise that they are not permitted to solicit or invite a person to offer more than the advertised rent. Agents can advise that the tenant should make their own decision about the rent they wish to offer.