Real estate agencies have been caught raising the prices of rental properties before going to inspection.
A text message sent by real estate agent Nelson Alexander to those interested in a rental property advertised at $600pw indicates that ‘due to the overwhelming response to this property… we have had to change the weekly rental amount to $650’.
The text was posted to Instagram on Thursday by Melbourne journalist Jacqueline Felgate with a caption asking if the outrageous move was “even allowed?”
Opinions on this question were divided in the responses.
There has been debate online about the legality of increasing the rental price from the previously advertised figure
Jake Caine, president of the Real Estate Institute of Victoria, responded that this was not the case.
‘If what is reported in the second image (SMS) occurs, it is a clear violation of the law and should be reported to Consumer Affairs. Happy to help if needed,” he posted.
“As a long-serving property manager, this is against the law,” someone else commented.
“It’s hard enough for tenants without this happening.”
In 2021, Victorian laws were passed banning so-called ‘rent bidding’.
“Rental providers (landlords) and real estate agents may only advertise or offer rental properties at a fixed price,” the law states.
“They are prohibited from soliciting rental bids or making rental offers higher than the advertised price.”
Can also share another message on social media that she received from a potential tenant.
“This is exactly what happened to us. Same desk. “I was at an inspection at an older house in Footscray, nothing special really, but there were about 30 others present,” the post said.
Real estate agent Nelson Alexander has apologized for increasing the asking price of rental properties before they were inspected
“The house was on the market on Friday for $650 and then was torn down and relisted on Monday for $850.”
Following this Felgate posted a message from Nelson Alexander insisting that changing the advertised price was “not a violation of the law” but saying it did not “meet the standards we hold ourselves to.”
The message continued with “my sincerest apologies for any frustration this may have caused.”
“To be clear, we do not solicit or encourage any form of lease bidding. We have taken the property offline and are currently reviewing our processes to ensure this never happens again,” said Nelson Alexander.
“We are deeply aware of the moral and social responsibility we have to the community in these challenging times and will continue to hold ourselves accountable.
We appreciate your patience and understanding as work.”
On her website Nelson Alexander claims it is ‘different to many real estate companies in Australia and this gives us a competitive advantage and ensures we can continue to deliver exceptional levels of service and results to our clients’.
Finding a rental property has become a nightmare in many Australian cities, where there are long lines for inspection
Under the heading ‘our core values’, the site states ‘we believe that our high-quality service is driven by a commitment to being reliable and transparent and always having a serious and sincere focus on ‘doing the right thing’.’
‘Delivering on our promises and acting with integrity are obligations that we attach great importance to for our employees.’
Felgate also shared another incident where it appeared the tenant was not being treated fairly.
‘My partner was evicted from her apartment over Christmas due to ‘the owners wanting to sell’, only to discover that once she agreed not to renew the lease, the owners had relisted it for rent with a significantly higher rental amount ($38 per week $465 per week) – I didn’t even try to mention if it was for sale!’
However, this message provoked some strongly worded defenses from landlords.
“I love how renters expect homeowners to absorb the rate increases and additional taxes that are being introduced. Do not you like it? Buy your own house,” said one comment.
“Victorians with second homes or investment properties will pay a new flat rate tax of up to $975 from January 1, 2024, plus an additional levy on the value of their land,” another message said.
Melbourne journalist Jacqueline Felgate shares frustrating experiences of people looking for rental properties
“Can’t you blame homeowners for wanting to use their investment properties for the intended purpose? Between interest rate hikes and additional taxes, what should they do other than raise rents so they can continue to manage the debt?”
However. a number of people commenting on Felgate’s posts shared their desperation to find a place to live.
‘I’m a single person house hunting. I feel like I have a better chance of winning the $100 million lottery tonight than I do of getting a lease,” one comment said.