THE RENTAL RACKET

As if you didn’t know, in tough economic times, the rent gougers are back in force. And it’s perfect weather for them. More people are renting. Vacancy levels are at their lowest in years. And for hundreds of desperate people their weekends go like this: Scour the newspapers and the Internet. Pick out five possibilities that aren’t really in the area of your choice but beggars can’t be choosers. Look at the tope end of your price range –because anything lower is bound to be virtually uninhabitable.

 Put together your best ‘ideal resident’ submission and head out into the rental jungle. You actually get to view the property. And eye off the other contenders. Maybe they’ve got kids. Or pets. Or the owners don’t like people with beards. You’re in with a chance.

But. And it’s a crucial ‘but’ these days. You've forgotten that awful word ‘gazump’. Hey agent says they want $350 a week. You’ve got your references. Submit your application. And you get gazumped. Somebody else offers $400. Maybe $450. The owner enjoys the feeding frenzy and tells the agent to hold out for $495. After all, he or she, says. It’s my place I’ll go for whatever the market will bear.

Don’t believe me? Then read Lisa Pascolo’s letter in the Herald Sun today. She had her partner inspected two townhouses advertised for $380 a week. The agent said their application was excellent. One minor problem they’d have to increase their offer by $50 a week. They then went on the Net and found the same townhouses listed for rent on three sites at $380, $420 and $440 a week.

The $380 was a starting price. A come-on. Bait advertising. It’s immoral but is it illegal?

Eighteen months ago the Real Estate Institute of Australia announced it was outlawing rental auctions. Sounded real tough. Rogue agents would be fined—even expelled. In February 2007 Victoria was the first state to bring in the new regulations.

Not only would rental auctions be stopped but agents would be banned from using a rental price range in advertising.

The REIV’s Chief Executive, Enzo Raimondo said at the time: "The REIV is conscious of the need for estate agents to deal fairly and honestly with prospective tenants, and treat them with courtesy, especially in the tight residential letting market."

Well, eighteen months down the track, not much has changed. Of course owners will say: It’s just market forces at work.

Wednesday, October 1, 2008

© Copyright Derryn Hinch 2008