Finding a rental is already an uphill battle, but behind the scenes, companies operating massive tenant databases can make it near impossible for renters who have previously stepped out of line.
Each time you submit an application for a rental property, it's likely your details will be checked against so-called rental blacklists, created to flag misbehaving tenants before they've signed another lease.
But as regulation around blacklisting has tightened, tenants' advocates say more informal avenues for landlords and real estate agents to influence their tenant's future rental prospects — whether they've breached their lease or not — are springing up.
Often just the fear of being blacklisted is enough to stop renters from pursuing their rights when it comes to rent increases, repairs and evictions, says Leo Patterson Ross, a spokesperson for the National Association of Tenants Organisations.
Consumer group Choice found about half of all Australian renters fear ending up on a tenant database, despite only 3 per cent reporting having it happen to them.
"One of the consequences of challenging any increase is your landlord might tell future agents: 'This is a person who challenges rent increases'," Patterson Ross says.
"It's unfortunate that by following the legal processes ... you can find yourself in more difficulty finding a new home. But that's often the consequence."
Rejection after rejection
Jennifer Searson has rented her entire life, so when she received a series of rejections for properties in regional Queensland in 2019 she suspected something strange was going on.
A year earlier, frustrated with what she saw as poor customer service from her property manager, she had posted a negative review of the real estate agency on Facebook. In response, she was met with angry messages and legal threats.
But the real problems began after the family of three were handed a no-grounds eviction at the end of their lease and they started searching for a new home.
"In our lives that had never been a problem because we've always worked, we've always paid our rent, we've always had to keep our noses clean, we make sure to do everything by the book because we have a child, we have to keep a home," Jennifer says.
"But we found we couldn't get any applications approved."
At the time, Jennifer couldn't figure out what was going on, but when she looked back at messages from the dispute with her property manager there was a clue. In a heated message exchange, he had threatened to list her on something he called "virtual ticker".
She now believes he was referring to a service called Virtual Manager offered by the Tenancy Information Centre Australasia (or TICA), a private company that collates renters' data and tracks tenants for real estate agencies that pay a subscription fee.
"It's so secretive," Jennifer says. "I just kind of stumbled across it all and then eventually worked it out."
How do rental 'blacklists' work?
So what is the reality of rental blacklists, and how much power do rental agents have to influence tenants' future housing prospects?
There are two kinds of "blacklisting" that tenants' advocates refer to, formal or official and informal or unofficial.
The first category refers to tenancy databases operated by a handful of private companies that are made available to real estate agencies and landlords for a subscription fee.
The three main databases in Australia are:
- The National Tenancy Database, operated by Equifax
- Trading Reference Australia (TRA)
- and TICA, which has previously claimed to be the largest in Australia with more than seven million records.
Hayden Groves, president of the Real Estate Institute of Australia, says these services are designed to protect landlords from running into problems with tenants who have a history of breaching their lease obligations.
"But in my experience, agents are very reluctant to put tenants on the list, not just from a regulatory perspective, but also in terms of what constitutes what is reasonable," he says.
"Particularly at the moment, real estate agents understand how difficult it is for tenants ... to find rental accommodation, and so we're very reluctant to put barriers up."
The rules on when a tenant can be listed on these databases vary between states, but typically renters can only be listed at the conclusion of a lease, when they owe more rent than the total of the bond, have caused damage to the property that exceeds the bond, or if it's been ordered by a court or tribunal.
"They used to be quite unregulated, but these days, they're quite specific about what would get your name on such a blacklist and the process for getting it off," says Joel Dignam, the executive director of tenants' advocacy group Better Renting.
Landlords or real estate agents must also inform tenants in writing if they plan to list them on a database, allowing them time to address the issue or appeal the decision. Similarly, if someone is rejected from a property because they are listed on a database, the leasing agent is bound to inform them of that fact.
In Jennifer's situation, none of these rules would have applied because the Virtual Manager service isn't part of TICA's official database.
The unregulated influence of agents
Outside of the formal tenant databases, there are myriad ways real estate agents can impact tenants' chances of being approved for rental properties in the future.
"What's happened is because the laws are quite tight around formal blacklists, it's pushed agents towards using these informal blacklists," Dignam says.
"And when the market is really tight, it's really easy for landlords or agents to discriminate against tenants, because of that sort of informal information sharing."
The first, and most obvious, way this can happen is through references provided as part of the usual application process. Groves says one of the first questions leasing agents will ask references is: "If this tenant was applying for one of your properties again, would you accept them?"
"If the answer is no, then there are clearly more questions that need to be asked about why not," he says.
This is a particularly big issue in regional towns with only a few agents, Patterson Ross says, where "you can easily find yourself forced out of town as a result [of a bad reference], so you're effectively blacklisted".
Then there are some products, like TICA's Virtual Manager, that skirt around the edges of the blacklisting regulations.
With Virtual Manager, agents are able to register their tenants' details and then receive an email notification if they apply for a property elsewhere, permitted the other agency is also subscribed to TICA. This opens the door for agents to contact their colleagues unprompted and offer their thoughts on whether that renter would make a good tenant.
Because no details of the tenant's rental history are held by the service (only their name and contact details), it doesn't fall under the same regulations as the formal databases.
When the service was launched in 2010, it was met with backlash from tenants' advocates, who described it as a breach of privacy. At the same time, TICA said its main purpose was to monitor the movements of tenants while they are still renting the property, so landlords could guard against unexpected departures.
TICA did not respond to a request for comment.
What to do if you suspect you've been blacklisted?
For renters, there's little way of knowing whether you've been put on the list. "In the current market, the reality is a lot of people who have good rental references are also missing out on places, so it's really hard to pinpoint," Dignam says.
Jennifer says she was only able to put the pieces together years later after finding a video demonstrating the service through a renter's Facebook group.
"I was like, that's it, this guy back in 2018 told me he was putting me on Virtual TICA," she says. "All he has to do is lift the phone and say to that potential new real estate agent, 'I wouldn't rent to them'.
"It wasn't until I saw the video that I realised the scope of what it really is, it's huge, it's national, it doesn't matter where you go, it will follow you."
In a competitive rental market, it's almost impossible for people to know why they haven't been accepted for a property. It's why tenancy law in most states requires both the former agent and leasing agent to inform renters if they are listed on a database.
But Patterson Ross says he has seen cases where that hasn't happened, especially as part of the new application process. "It's very ineffective," he says. "Because if you've been knocked back on a property because you have a slightly lower income than someone else, the database listing, even if you're listed, didn't necessarily have an impact on that."
If you find out you've been listed, you can write to the landlord or agent who listed you and they must provide details of information included in the database. Individuals can also apply to the databases themselves to have any information held about themselves released, often for a small fee (in NSW the information must be released free of charge).
In most states and territories, listings are required to be removed after three years. Tenants can also challenge a listing on the basis that it is out of date, unjust or inaccurate. An example of when it might be unfair to list someone is when a tenancy has been ended or damage to the property occurred in the context of domestic violence.
There are penalties for both operators and agencies if they fail to comply.
"This is why access to your own personal information is important because you need to be able to see the listing to know what's being said about you, so you can correct it or have it taken down when it's inaccurate," Patterson Ross says.
"It's either the tribunal or magistrates courts that decide these things."
When it comes to informal blacklisting, it's much harder to reverse.
"A lot of the time people don't know about the references being given, they're often not disclosed, and particularly when they're verbal, there's often not a record," Patterson Ross says.
"You have to question: what is the point of a tenancy database that is supposed to list you as a person who might have problems with renting in the future if the references can say anything they like?"
