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Image: Archi Banal
Image: Archi Banal

MoneyDecember 23, 2021

Can they really ask me that? How invasions of privacy have become the norm for renters

Image: Archi Banal
Image: Archi Banal

In a housing market where landlords have all the power, applicants are expected to answer questions that frequently break laws meant to protect them. Felix Walton investigates.

“Flat hunting has never been fun.”

Lara* is a prospective tenant searching for a home in Auckland. With a market controlled by landowners, and increasingly unreasonable costs, this is no simple task, and for Lara and others like her, it’s not getting any easier.

Australian-based rental application service 2Apply, now used by Barfoot & Thompson, claims to make the process easier – but for Lara, it’s a source of indignity.

“The questions they ask go way beyond anything I’ve ever seen before,” she says. “I’ve never felt such an invasion of privacy.”

Among the information Lara was asked to provide were precise income details and employment information, previous rental costs, and contact information for everyone from her dad to her vet.

“What the heck does my landlord from five years ago, or my dad, have to say that’s relevant to getting a roof over my head?”

For someone desperate to find a place to live, caving to these demands can be the only option. “It feels like a Black Mirror episode,” Lara says, “but people will submit to the process because we all need a home to live in.”

By law many of these questions must be optional, while others shouldn’t be asked in the first place. “A landlord should not ask for a potential tenant’s employment history, or about whether a person is employed or on a benefit,” notes a spokesperson from the office of the privacy commissioner. “[But they] can ask to see proof of income during the final stages of the process.”

But this proof of income does often reveal the applicant’s employment status, even though landlords aren’t supposed to know. “Proof of income will probably reveal whether a person is in employment or on a benefit,” the privacy commissioner admits, “but a landlord must not use [that] information.”

The reality, however, is often different. This loophole, through which landlords can discover an applicant’s employment status through their proof of income, allows them to act on that information as they see fit – they just have to keep it on the down-low.

In practice, landlords can and do search for information that they shouldn’t have.

“We’ve seen an increase in the number of questions that property agents and landlords are asking [applicants],” says Consumer NZ CEO Jon Duffy. “One that I came across the other day was asked if they’re ‘politically significant’ – how on Earth is this relevant?

“In some cases we see landlords request a number of months’ worth of bank statements so they can pore over [the applicant’s] spending habits. I think that’s pretty invasive and arguably, unless there’s a legitimate reason, in breach of the Privacy Act.”

Invasive requests such as these have become surprisingly common within our renting market, but they’ve never been legitimised. A concern with services like 2Apply is that it enables these questions to be asked en masse under the guise of being optional, with the not-so-subtle implication that applicants unwilling to share this information will be disadvantaged.

Users are “encouraged” to answer these questions through 2Apply’s rating system, which assigns a star ranking to users depending on how much information they provide. When I filled out an application, sharing the minimum information required, I was given a measly two stars. With a rating that low I don’t expect to be invited to a viewing any time soon.

The hidden function of this rating is, ultimately, coercion. There’s a very real chance that, in order to compete in the market, applicants will feel pressured to share information they wouldn’t otherwise. 

When contacted for comment, Barfoot & Thompson noted that it maintains a close working relationship with the Privacy Commissioner. “We also have an in-house legal team along with a privacy expert making sure we do not cross those very important privacy lines,” a representative says. “We’re very surprised to hear something that suggests otherwise.”

They also noted that many of the questions highlighted by Lara were either optional or not included in the New Zealand version of the site.

Upon revisiting the site, I discovered that some pages Lara had screenshotted weren’t accessible and that the star rating had been quietly removed. When asked where these features had gone, 2Apply’s support staff noted that they were being “phased out”.

A statement from 2Apply says the service “complies with the privacy requirements in each jurisdiction it operates, including the new requirements that are being introduced in New Zealand”.

It appears that these changes bring 2Apply in line with New Zealand’s privacy laws, but the suggestion that these requirements are new is questionable. Though the Privacy Commissioner just released new guidance materials for property managers last month, our updated Privacy Act commenced in December of last year, with many of these laws having existed for decades before that.

From next year, the privacy commissioner aims to enforce these laws more strongly. “From March, we will regularly check on how landlords are operating, starting with the biggest private sector rental companies,” a spokesperson says says. “We will carry out mystery shopper activities to check they are asking for the right information, at the right time, in a responsible way.”

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