New OPC privacy guidelines for landlords have prompted widespread concern among landlords and property managers about what exactly can be asked when selecting tenants.
Of particular concern for many has been the prohibition on asking for authorisation to obtain a credit report: the guidelines say it is only sometimes justified if satisfactory references aren’t available.
But Privacy Commissioner spokesman Charles Mabbett says the guidelines relate to the pre-tenancy or application stage of the process, not the vetting of the preferred tenant.
They set out what is acceptable for landlords and property managers to ask prospective tenants when they are at the stage of viewing and applying for a property, he says.
“What we are trying to get across to landlords and property managers is that it is about the appropriate process. Think of it as similar to the process of applying for a job.
“If someone is applying for a job they don’t have to give all sorts of personal information up front, instead it is collected further down the line in the process.”
The same should apply to prospective tenants embarking on the application process as OPC believes the collection of more personal information is not necessary in the early stages of that process.
Mabbett says that once a preferred applicant has been selected it is then possible to undertake credit checks, as well as recording proof of identity and checking references.
“It is still necessary to get the consent of the individual in question. But if the individual says no, then that would be big red flag.”
When asked how preferred candidates can be selected from multiple applications if a landlord or property manager is unable to look at a credit record, he says the guidelines allow for plenty of information to be collected early on.
“It’s ‘always justified’ to ask for references from previous landlords and if the applicant has ever been evicted, and to get authorisation to perform a criminal check. That’s quite a lot of critical information which you could base a shortlist on.”
However, the NZ Property Investors Federation is not convinced that the new guidelines are realistic when it comes to tenant selection.
NZPIF executive officer Andrew King says that it is not possible to rely on references because they can be easily forged and/or inaccurate and, as such, are not reliable.
For that reason, authorisation to obtain a credit report should be ‘always justified’, rather than only required when other satisfactory references are not available.
“You do need the information from a credit report to make the decision about who you want to seriously consider for your rental property which is, after all, an expensive asset.
“Not allowing credit checks early on is very unreasonable as landlords need to be confident about the person or people they are entrusting with their property.”
It would be unlikely that a landlord or property manage would run a credit check on every single applicant for a tenancy, King adds.
“Maybe you’d run a credit check on the top three applicants. But you need to have the ability to do it.”
The NZPIF plans to ask the Office of the Privacy Commissioner for a meeting to discuss various points of concern or confusion in the new guidelines.
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