In today’s competitive rental market, renters are looking for any way to secure a property quickly. One practice gaining attention is rental bidding.
But what is it, and is it even legal in your state? More importantly, do you need to take part in this to land your next home?
With the rental market getting tighter, there’s been a noticeable rise in rental bidding—where tenants offer more than the advertised price to secure a property. Sometimes, landlords or agents ask potential tenants if they’re willing to pay more, but is this practice fair or even allowed?
Let’s dive into what rental bidding is, the laws around it, and what you can do to avoid getting caught up in it.
What is Rental Bidding?
Rental bidding happens when renters offer higher offers than the advertised rent to secure a rental property. In a competitive market, some renters feel pressured to offer more, hoping it gives them an edge.
Sometimes, renters voluntarily offer more, while in other cases, landlords or agents subtly encourage higher bids.
The tricky part? Unlike a traditional auction where bids are open for everyone to see, rental bidding is often private. A potential tenant might submit a note with their rental application offering a higher amount or use a rental bidding app to place their bid.
Is Rental Bidding Legal?
The legality of rental bidding varies across Australia. Here’s a quick breakdown of bidding laws by state:
- New South Wales: In NSW, as of 2023, the government banned landlords and real estate agents from asking tenants to offer more than the advertised price. While prospective tenants can still offer to pay more, agents can’t solicit higher bids.
- Victoria: Similar to NSW, Victoria also introduced new laws preventing agents from suggesting or requesting higher offers from tenants.
- Queensland: Queensland hasn’t outright banned rental bidding but does have rules. While tenants can offer more, agents and landlords cannot openly ask for it. However, they can accept higher offers if they’re voluntarily made by the tenant.
- Western Australia and South Australia: These states currently don’t have strict laws against rental bidding, but agents and property managers are expected to follow ethical guidelines. Encouraging bidding may breach professional standards and could fall under misleading or deceptive conduct.
Across the board, rental bidding is largely seen as unethical. It can worsen rental affordability, especially in areas where rental prices are already high.
How to Avoid Rental Bidding Pressure
If you’re a renter, you can take steps to protect yourself from the pressure of rental bidding. Here’s how:
- Stick to Your Budget: Don’t get caught up in offering more than you can afford. Use the “30% rule” when looking at rental prices. This means aiming for rent that’s 30% or less of your income. For example, if you earn $1,000 a week, try to find properties around $300 a week rather than $450.
- Apply Early: Being one of the first applicants can put you in a good position. Ensure your rental application is complete with all the necessary documents—payslips, bank statements, and references from previous landlords.
- Communicate with Your Current Agent: If you’re already renting, reach out to your current property manager. They may have other properties coming up or be willing to give you a good reference.
- Be Flexible: If possible, offer to move in earlier or agree to a longer-term lease. Flexibility can sometimes give you an advantage over other applicants, without the need to offer more than the advertised rental.
What to Watch Out for as a Tenant
When applying for a residential rental property, keep an eye on any signs of rental bidding. If an agent or landlord asks if you’re willing to pay more than the fixed price, be cautious.
It’s important to know your rights and the bidding laws in your state. If you feel pressured, consider reporting the behavior to the local fair trading office.
Final Thoughts on Rental Bidding
Rental bidding can drive rental prices up, making the market even more competitive. While it may seem like a quick solution to secure a rental, it’s important to weigh the long-term costs.
As a tenant, sticking to your budget, being prepared with your rental application, and understanding your legal rights will help you navigate this challenging landscape.
Keep in mind that laws around rental bidding are evolving, and some states may further regulate the practice in the coming years. Stay informed and be smart about how you approach the rental market.
FAQs on ‘Rental Bidding’
How Do You Deal with Rentals?
Dealing with rentals involves understanding your rights and responsibilities as a tenant or landlord. Tenants should carefully read the lease agreement, maintain open communication with the landlord, and ensure timely rent payments. Landlords should manage their properties, comply with local rental laws, and ensure their tenants’ concerns are addressed promptly.
Is Rental Bidding Illegal in NSW?
Yes, rental bidding is illegal in NSW. Recent legislation mandates that rental advertisements must include a fixed price, and landlords or agents cannot invite offers above this amount. Ambiguous phrases like “offers from” or “by negotiation” are no longer allowed in rental listings.
Is Rental Bidding Illegal in WA?
Yes, rental bidding is also illegal in WA. Landlords and agents are prohibited from asking or encouraging prospective tenants to offer more than the advertised rental price to secure a tenancy.
Is Rental Bidding Illegal in QLD?
Yes, rent bidding is illegal in Queensland. Landlords are required to advertise rental properties at a fixed price. Failing to do so is an offence under Queensland law.
How Do I Get a Good Rent Deal?
To get a good rent deal, start by researching the rental market to understand current prices. Offer value beyond rent, such as agreeing to maintain the property well, to negotiate lower costs. Present yourself as a reliable tenant, consider renting during the off-peak season, and experiment with different lease terms to find a better deal.
