It may not be widely known, but Property Managers will use “Tenancy Databases” during the tenant selection process to uncover previous issues, before making a recommendation to the landlord. In a nutshell, these Databases are used as a way to ‘blacklist’ tenants that owed money after their tenancy ended or breached their agreement for a matter big enough to be taken to a Tribunal.
Here are the facts you should know about the use of Tenancy Databases in Australia.
1. Tenancy Databases are operated by private companies and are on a subscription only then fee-per-search access. TICA for example, which claims to be the largest of them, will charge an annual subscription of around $220, then every search is just under $20. You must be a licensed Real Estate Agent to be given access.
3. All Providers offer a service to consumers if – they believe they have been listed and- they want to get a copy of their record.
4. None of the providers shares information with the others and all listings are added manually by Property Managers.
5. Property Managers will subscribe to at least one but never all as it is not practical. They will always have a preference for one of them, whilst anecdotally, different states appear to have preference for one over the other (TICA more used in one state, but NTD in another).
6. The process of placing a tenant OR searching for a tenant on a Database is heavily governed by the Tenancy Act in each state. Whilst each state has slightly different rules, the following are more or less true:
• Only people listed on a Tenancy Agreement can be added to a Database.
• A Tenant can only be placed on a Database AFTER the tenant has vacated the property.
• A tenant can be listed on a Database if they owe rent after Bonds have been sorted OR a Tribunal made a determination against the tenant for breach on the agreement.
• When a Property Manager places a tenant on the Database, the information must be complete, accurate and clear.
• Property Managers must notify a tenant in writing BEFORE they can list them. In NSW and Victoria that is a minimum of 14 days in advance. In that time, the tenant can rectify the issue OR apply to the Tribunal, if they object. If there is an application to the tribunal pending, the Property Manager has to wait the outcome of the hearing.
• If a Property Manager finds a prospective tenant’s name on the Database during the selection process, they must inform them of it AND must also provide them with enough information to be able to track the listing details down (either via the listing agent or by approaching the Database provider directly).
• A tenant is entitled to the copy of their Database file from the listing agent – free of charge and from the Database at request (some will charge).
• Listings will automatically get removed after 3 years.
• If a tenant listed on a Database rectifies the problem within 3 months, the Property Manager must remove the listing. If they rectify the problem after the 3 month mark, the listing remains but will be amended to reflect that a change has occurred (marked with a status of “inaccurate”).
Whilst good in theory, the effectiveness of Tenancy Databases is debatable at best. Every Property Manager would love to have a reliable mechanism to weed out the unsuitable tenants quickly, but there are some major flaws with the concept. First of all, the process relies on the goodwill of the impacted agency and the Property Manager who, let’s face it, all they want is to move on. Going through the red tape to first list, then have to manage the listing, adds zero value to them so a lot of Property Managers simply don’t bother.
The other major issue with the process is that there is no sharing of listings amongst Tenancy Databases which means that an agency would need to subscribe to all of them. That increases the costs and hassles for the Property Manager when there is no guarantee in the first place that a tenant that should have been listed, actually has.
The last issue of course is that whilst it is hard to have someone listed, it is relatively easy for them to come off, wiping their slate clean of all sins so to speak. A tenant that was constantly behind on their rent, one that didn’t look after the property and it deteriorated, or one that allowed 2-3 people extra people and/or pets, not on the lease, move in, or one that fought with the neighbours constantly or breached the agreement in any other way before packing up and leaving, may never appear on a Database. Neither would you find bad tenants that managed to get off Tribunal on a “technicality”.
It is this type of information as well as the ability to pay the rent that a Property Manager is chasing, and that will never come from any of the Tenancy Databases.
Who we are:
NextGen Property Mgmt (www.nextgenpm.com.au) is a boutique Real Estate licensed agency that specialises in property management. NextGen Property Mgmt does NOT has a sales team unlike most other agencies that specialise in Sales and have Property Management as a side business.
Our area of focus is residential property and we operate in Inner and South West Sydney, as well as St George.
NextGen was created from its infancy to cater for investors as it was founded by investors who quickly realised that in a highly regulated industry like Real Estate – competence, expertise, care and service by property managers varies greatly.
As an investor, you need to have trust for and feel valued by your property manager. You need to know that your property is being looked after with minimal disruption and you are getting maximum return for your investment. At NextGen we understand that because we are investors living busy lives ourselves, so our promise to you is that you will no longer have to worry about your most valued asset because we will make sure to take care of it as if it is our own.
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