Rental Blacklists open for Scrutiny

The following article was published in the Law Institute Journal in June 2006.

 

Commercial databases listing people’s rental histories have come under scrutiny since the Queensland Government set up the first review of them in 2002.

Now the Victorian Law Reform Commission (VLRC) has recommended the federal and state governments regulate the sector to ensure all listings have a fair basis.

While national regulation would be ideal, in its absence the VLRC has recommended the state government step in to ensure the reasons behind tenant listings are transparent and fair.

A national review of the problem occurred in late 2003 but the committee has yet to recommend a national response. The federal Privacy Commissioner has also recommended tighter controls. The Standing Committee of Attorneys-General was due to discuss the issue at its April meeting.

The VLRC began its investigation of the problem after being approached by the Tenants’ Union, which was concerned that some tenants had been unfairly listed on the databases.

Some of the examples the Tenants Union provided to the VLRC were:

  • Debts run up by housemates or former partners being attributed to others on the lease agreement;
  • Disputes that tenants had thought were resolved with agents being used as a basis for a listing;
  • Difficulties in getting information from real estate agents or database operators;
  • Difficulties in getting incorrect or unfair listings removed.

To improve the transparency of the process, the VLRC has recommended that tenants only be listed on databases if an order from the Victorian Civil and Administrative Tribunal (VCAT) has been made against them for breach of a tenancy agreement or breach of the Residential Tenancies Act.

Real estate agents can currently recommend any tenant to the database operators for listing for a range of reasons.

Under the VLRC recommendations, tenants would not be listed until VCAT’s specified period of time for rectifying the breach had elapsed and if tenants rectified breaches in the specified period then they could not be listed. Real estate agents wanting to list someone who had not rectified a breach would have to sign a statutory declaration that the tenant had not complied with the VCAT order.

The VLRC has recommended that people receive notice of the consequences of breaching the Act or a tenancy agreement when they sign a lease and when they receive an order to appear before VCAT for breach of the Act or agreement.

To combat the difficulties tenants have had in finding out if they are on databases, the VLRC has recommended that agents must tell tenants if they find any information about them on a database and they must provide copies of listings to tenants who have their rental application refused.

If tenants wanted to check databases for a listing about themselves then operators would have to provide the information for free or for a small charge if it was required urgently (within 48 hours).

If tenants found listings about themselves that were incorrect, misleading, or for breaches that had been resolved or were out of the hands of the tenant, then operators would have to remove the listing. Tenants would have the option of taking database operators to VCAT if they did not remove such listings.

To ensure listings are up-to-date, the VLRC recommends all listings should automatically expire after three years.

Real estate agents and database operators who fail to comply with any of the recommendations would face civil fines. Operators would also have to pay tenants a small fee for each day a listing appeared on a database where no VCAT order had been made, where the VCAT period of compliance had not elapsed, a statutory declaration had not been received by an agent regarding the tenant’s failure to comply with a VCAT order, or if the listing had not been removed after three years.

The VLRC review was undertaken as part of its community law reform responsibilities. Under the Victorian Law Reform Commission Act, the VLRC can examine, report and make recommendations about any minor legal issues of general community concern without a reference from the Attorney-General.

Three interns from the Victoria Law Foundation’s internship program undertook the bulk of the report’s research, writing and footnote checking, under the guidance of VLRC staff and commissioners.

Ideas for law reform projects are welcomed by the VLRC, either as a suggestion for a reference from the Attorney-General or as a community law reform project.

For copies of the Residential Tenancy Databases: Report please visit the VLRC website (www.lawreform.vic.gov.au) or call 8619 8619.

Date published: 
01 Jun 2006

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