02 Oct Rent advertising, what are the rules?

Rent such a small word plays a big role, as your rent price determines the overall return on your investment property. Property rents represent the basic economic equation of supply and demand. As this is a market driven device – it doesn’t matter what amount you as a landlord would like to receive for rent, rather what are the tenants willing to pay?

However, rent levels are not purely market driven; there is a degree of price manipulation due to laws that surround the advertising of rental properties. These laws are aimed squarely at the practices of ‘rent bidding’ and ‘rent ranging’ and are designed to limit inflationary rent markets.

Rent Bidding

Is when the owner or the agent solicits a higher rent than the advertised rent amount. In some instances this can even extend to ‘rent auctions’. Rent bidding is very much a symptom of a very tight rental market – or tenant demand outstripping the supply of rental properties.

Rent Ranging

Occurs when a property is advertised with a price range, e.g. $400- $500 per week. Implying that tenants prepared to offer a higher price are more likely to be approved. For those states where this is banned it is okay to offer different rent rates to reflect optional inclusions in the lease, for example: you provide the option of furnished or unfurnished and different rents for each. This is not considered to be a rent range as you are stating two fixed prices.

Though not illegal in every state our advice is that neither rent bidding or ranging should be instigated by the owner as the conduct may contravene state legislation and also be a breach Australian Consumer Law.

“My advice for self-managing landlords is to follow the same rules that govern real estate agency’s code of conduct when advertising your investment property. This means you should not:

• Advertise a property with an unrealistically low rental price or at a price below what will be accepted for rent with the intention of engaging in a ‘rent auction’. 
• Advertise a misleading rental range for a property that is unrealistic, where you would not rent the property at the lower end of the range.
• Tell an applicant that someone is willing to pay a higher rent if this is not true.
• List a property without a price.”

However, it is important to note that there is no law in any state preventing a tenant from making a higher offer on the advertised rent.

The rules for rent advertising in your state?

Australian Capital Territory

A fixed price must be advertised. Rent bidding cannot be encouraged by the owner.

New South Whales

A fixed price must be advertised. Owner must notify other parties of a higher offer.

Northern Territory

Rent bidding is legal. However the owner must not engage in any deceptive conduct associated with the process.

Queensland

A fixed price must be advertised. Owner must not invite applicants to offer an higher rent, but they do not have to disclose a better offer from another applicant.

South Australia

Rent bidding is legal. However the owner must not engage in any deceptive conduct associated with the process.

Tasmania

A fixed price must be advertised. An owner must not invite an applicant to offer a higher rent.

Victoria

Rent bidding is legal, however is being reviewed as part of the overhaul of residential tenancy laws. The owner must not engage in any deceptive conduct associated with the process.

Western Australia

Rent bidding is legal. However the owner must not engage in any deceptive conduct associated with the process.