The NSW government is set to ban fees prospective tenants are charged for background checks when applying for a rental property.
Currently, there are some online rental property application apps that encourage renters to pay between $25 – $30 to cover the cost of their own background checks, on top of providing detailed information to the property manager.
These ‘optional’ charges often come with the promise that they’ll increase an applicant’s chances of securing a home.
The Minns Labor Government will change the law to make it clear that renters cannot be charged for background checks.
Premier Chris Minns said the move aims to find the right balance between renters and homeowners.
“With the rental market so competitive, many renters have felt pressured into paying for these checks,” Mr Minns said.
“Owners will still be able to make sure their prospective tenant hasn’t done the wrong thing at a previous rental.
“But you shouldn’t have to pay for your own background checks just to apply for a place.”
Under the changes, the only payments renters can be charged when applying will be the deposit, the rental bond, rent for the property, and any fee for registration of a lease longer than three years.
Landlords will continue to have the right to check or make reports to third-party tenancy databases, in line with the strict rules already in place.
Tenants can only be listed on a database for two reasons, either they have left the property and owe money, or the tribunal has made an order to terminate the agreement because the tenant has done the wrong thing.
The changes will form part of a package to update and modernise the NSW rental market, including reforms to finally end no-grounds evictions, which will be debated by Parliament later this year.
Under the proposed reforms, expected to begin early next year, homeowners will now need a reason to end a tenancy for both periodic and fixed-term leases.
Minister for Fair Trading and Better Regulation, Anoulack Chanthivong, said a renter shouldn’t have to pay just for the privilege of securing a home.
“We need a more modern and fairer rental market in NSW because renters are being punished by a system that hasn’t kept up with change,” Mr Chanthivong said.
