Consumer NZ’s recent study of rental property managers found some prospective tenants were being asked, potentially unlawfully, to share more personal information than necessary in their property applications.
The watchdog conducted a nationwide mystery shop of property agents to find out whether they were following guidance issued by the Office of the Privacy Commissioner (OPC).
The guidance was designed to help landlords and property managers comply with the Privacy Act (2020). The guidance states that a landlord or property manager should never ask a prospective tenant for information protected under the Human Rights Act, including:
The guidance also states a prospective tenant should never be asked to provide bank statements for their spending habits to be reviewed.
Mystery shoppers posing as prospective tenants asked rental agents about the information they collect from renters.
In the mystery shop, 10% of agents encouraged the caller to volunteer extra information with a cover letter and ‘rental CV’, which might include information such as age bracket, gender, relationship status and employment status. One property manager said, “the more information you give, the better your chances [of securing a rental property]”.
Another agent echoed that sentiment, telling the mystery shopper “the more information you provide [about yourself], the smoother the process”. Another suggested extra information would “make your application stand out from the others”.
As part of this study, Consumer asked the public to share their experiences of the rental sector. The call-out received one of the highest response rates in Consumer’s history.
Gray, a 25-year-old in Christchurch, said her landlord was asking “some really weird questions”, including how long she had held her current phone number, and her boss’ phone number to verify her place of work. Gray was also asked to provide bank statements and salary details.
The OPC's Privacy Act Guidance For Tenants explains when a prospective tenant applies to rent a property, the landlord shouldn’t ask for bank statements to assess their spending habits. Asking about how tenants spend their money is unfair and unreasonably intrusive, except in exceptional circumstances, OPC believes.
Alarmingly, 6% of agents asked the mystery shoppers to include bank statements in their application. This has the potential to breach the Privacy Act.
“The rental market remains tough in many areas of the country, and many prospective tenants are offering up more information than required just to get a shot at being considered for a property,” Consumer NZ Chief Executive Jon Duffy said.
“It's concerning that some renters are expected and encouraged to give up sensitive private information, but it also raises questions about what happens to this information. Property managers could be discriminating against some applicants, based on the information they provide.”
Mystery shoppers also asked how their information would be stored, and 14% of agents became noticeably disinterested in the mystery shopper when they asked about the privacy and security of their information. One mystery shopper noted, “the more questions I asked, the less interested [the agent] seemed, and [he] almost got annoyed by them”.
OPC developed its guidance in response to growing concern over a power imbalance between tenants and landlords due to a shortage in the housing market.
“We saw that some property management agencies were asking for very detailed information from prospective tenants as part of their selection process,” Privacy Commissioner Michael Webster said.
“Recognising that tenants had little power to challenge those responsible for their housing security, we took a proactive stance to protect the rights and privacy of tenants and prospective tenants.
“We worked with rental agencies and renters’ advocates to develop guidance to clarify the rights and responsibilities of tenants and landlords under the Privacy Act,” Webster said.
“Mystery shopping is one way for us to monitor how well the guidelines are being followed and target our compliance activities.”
The OPC's guidance for tenants notes landlords shouldn’t collect unnecessary and intrusive information from prospective tenants. However, it also states that the amount of information a prospective tenant gives to a landlord when applying for a property is their choice – but the amount of information provided may affect a landlord’s decision to offer a property. Prospective tenants should not be disadvantaged for refusing to provide information that shouldn’t be asked for at all.
“Renters are feeling pressured to share personal information to sell themselves to a potential landlord or agent,” Duffy said. “Ultimately it is up to the applicant how much information they share. The way we see it, they are damned if they do and damned if they don't.
“We hope the findings in this research encourage property agents to clean up their act. The Office of the Privacy Commissioner and Consumer NZ will continue to monitor this space.”
Consumer’s research highlights the system is not working as well as it should for renters, who are hugely disadvantaged by the power imbalance between a prospective landlord and prospective tenant. The findings make the case for greater regulation of property agents. The Ministry of Housing and Urban Development is currently investigating a regulatory regime.
The Office of the Privacy Commissioner supported Consumer NZ with this investigation.