The Privacy Commission has finally released their updated guidelines for landlords and tenants.
Back in August of 2018, property management hit the headlines for the wrong reasons. A property manager who was appearing in front of a select committee admitted to looking through tenants bank statements and observing the tenants spending habits. This infamously became known as the ‘KFC test’ as the property manager confessed to seeing certain tenants waste money on KFC as well as other poor spending habits.
There was outrage about this, which and this prompted the Office of the Privacy Commission (OPC) to investigate whether this was a widespread practice.
However, earlier this year, the industry made the news again as it was reported that a Facebook group called ‘Bad Tenants New Zealand’ had a list of 200 ‘bad tenants’ with 3,200 members as a part of the group. Many of the
members were property managers. The OPC had seen enough and announced an investigation in the practices that took place around tenant selection. After months of investigation, the OPC has now launched a new compliance monitoring programme to ensure that property managers are acting in accordance with the Privacy Act.
The OPC will now be carrying out regular checks of rental agencies as well as an annual audit of application forms and the privacy policies of the property management industry. This includes third-party service providers.
Alongside the monitoring of the industry, the OPC have also released updated guidelines for tenants and landlords. As an industry we need to improve, and the OPC has now has powers to take the following action against non-compliant agencies.
• Warning letters
• Access directions
• Compliance notices
• Referral to the Human Rights Review Tribunal
• Public interest inquiry
• Public naming of an agency
• Fines of up to $10,000 for failing to comply with a Compliance
Tenants and prospective tenants also have the ability to anonymously report privacy concerns to the OPC.
The main concern that has arisen is that the amount of information some agencies and landlords are obtaining from the outset, goes way beyond what should be sought. The guidelines provided to landlords and tenants alike, put applying for a rental property into a staggered process. The stages are as follows.
Enquiry to view the property; At this point, the only information you need as a landlord or a property manager is the name and the contact details of the prospective tenant.
Applying for the rental property; Once a prospective tenant has viewed the property and they decide they want to apply, they will then fill out an application form. At this stage, the landlord will be able to ask for the following information.
• Name and contact information
• Proof of identity
• Whether the applicant is aged 18 years or older
• Number of people who would live at the property
• Names only of occupants who will not be on the tenancy agreement (e.g. flatmates, dependents)
• Contact details for landlord and non-landlord references
• Consent for a credit report and criminal record check (to be obtained only if you are in negotiation with a tenant about an offer of tenancy)
• Pet ownership
• Whether any occupants are smokers
• Whether the tenant has a legal right to remain in New Zealand for the duration of a tenancy (only for fixed-term)
Once this has been obtained, the landlord or property manager will make a shortlist of preferred candidates. This is likely to be no more than two or three applicants. At this point, you will be entitled to carry out the background checks such as references, credit checks and proof of income.
Property Managers and landlords cannot ask for the following information from a prospective tenant.
• Personal characteristics protected under section 21 of the Human Rights Act
• Whether the tenants have experienced or are experiencing family violence
• Spending habits
• Employment history
• Social media URLs
Tommy’s Property Management is in full support of the OPC and its stance to protect the privacy of tenants across New Zealand. If you want to know more about how we select our tenants or any other information around our services, feel free to contact us.