Using tenancy databases accurately and fairly
Know your rights and obligations
The use of tenancy databases is a risk management tool for property agents/owners to screen the tenancy history of prospective tenants and to list defaulting tenants once the tenancy has ended and under certain conditions.
Recording unfair, unjust or inaccurate listings of tenants can be avoided by following the rules set out in the Residential Tenancies and Rooming Accommodation Act 2008 (the Act) noting what, when and why people can be listed.
Several sections of the Act, in relation to the use of tenancy databases, carry penalty provisions, where if contravention of the Act occurs, fines can be incurred. The RTA recommends all parties be aware of these provisions to protect themselves and the privacy of tenants.
When screening prospective tenants during the application process using tenancy databases, property managers/owners must:
- Advise prospective tenants what database/s are used in the application process
- Advise tenants (in writing) if a listing of them has been found
- Advise how a listed tenant can obtain information about the listing
A tenant can be listed on a database if:
- The tenant was a named tenant on the tenancy agreement
- The tenancy agreement has ended and there is an approved reason for listing the tenant (see below)
- The Tribunal has not made an order prohibiting the listing
- The tenant has been informed of the proposed listing or all reasonable steps have been taken to advise the tenant of the proposed listing (timeframes apply).
A tenant can be listed on a database for the following reasons:
- Unpaid rent, where a breach notice has been issued and the unpaid rent is greater than the bond amount
- Owing money greater than the bond amount under a conciliation agreement or Tribunal order and the time to pay the money under the order has passed
- Owing money greater than the bond amount after abandonment of the property (and there is no current objection by the tenant)
- Objectionable behaviour (if a Tribunal order has been made for termination of the agreement)
- Repeated breaches (if a Tribunal order has been made for termination of the agreement)
Important considerations before listing a tenant on a database:
- Tenants can challenge proposed listings and current listings if they are inaccurate, incomplete, ambiguous or out of date.
- If a debt has been paid by a defaulting tenant, the listing must be removed from the database.
- A listing can only be kept on a database for 3 years. There is legislation for both database operators and property managers/owners on management practices to avoid out-of-date and unlawful listings.
- Breaching laws relating to tenancy databases carry a penalty of between 20 and 40 units per offence ($130.55 per unit) for individuals. Corporations found guilty could face fines 5 times that amount. Privacy laws may also come into play when tenancy databases are used to record tenants' personal information. Check your obligations on the Office of the Australian Information Commissioner website.
Do you know what documents need to be handed over in a change of management? Read our article on this now.
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